WASHINGTON — Rocket Lab, a developer of launch automobiles and smallsats, will merge with a special-purpose acquisition firm (SPAC) to assist improvement of bigger launch car, a part of the most recent wave of offers to take area firms public.
Rocket Lab introduced March 1 that it’ll merge with Vector Acquisition Company, a SPAC established final yr by enterprise capital fund Vector Capital. The deal is predicted to shut within the second quarter, with Rocket Lab then traded on the Nasdaq trade underneath the ticker image RKLB.
The merger will present Rocket Lab with as much as $320 million from Vector Acquisition’s account. As well as, a concurrent personal funding in public fairness (PIPE) spherical, led by Vector Capital, BlackRock and Neuberger Berman, will present $470 million. The merger will worth Rocket Lab at $4.1 billion.
“This milestone accelerates Rocket Lab’s potential to unlock the total potential of area by means of our launch and spacecraft platforms and catalyzes our ambition to create a brand new multi-billion-dollar enterprise vertical in area functions,” mentioned Peter Beck, chief government and founding father of Rocket Lab, in a press release asserting the merger.
“Rocket Lab is a once-in-a-generation firm that’s democratizing entry to area by means of its fixed innovation, main expertise and confirmed execution,” Alex Slusky, chief government of Vector, mentioned within the assertion. Slusky will be a part of the board of Rocket Lab as soon as the merger closes. “Rocket Lab is ideally positioned to proceed to seize market share within the quickly increasing area launch, programs and functions markets.”
Rocket Lab is finest identified for its Electron small launch car, which has launched 18 occasions since 2017. The corporate can also be engaged on a smallsat bus known as Photon designed to be launched with Electron. It launched the first Photon satellite last August and can launch the second on the following Electron launch in mid-March.
Rocket Lab had raised $288 million in a number of funding rounds, most recently $140 million in a Series E round in November 2018 that valued the corporate at greater than $1 billion. Beck described that spherical as “a giant keg of dry powder” to permit it to climate disruptions such because the pandemic, in addition to assist new initiatives like its Photon satellite tv for pc bus and an ongoing effort to reuse the Electron’s first stage.
The funding from the SPAC merger will allow one other new initiative. Rocket Lab mentioned it’s engaged on a medium-class launch car known as Neutron, able to inserting as much as 8,000 kilograms into low Earth orbit, greater than 20 occasions the capability of Electron. The corporate disclosed few technical particulars about Neutron, however mentioned that it intends to make the primary stage reusable by means of propulsive touchdown on an ocean platform, just like SpaceX’s restoration of Falcon 9 first levels.
The brand new car is meant to assist the rising curiosity in satellite tv for pc megaconstellations. “Neutron’s eight-ton carry capability will make it ideally sized to deploy satellites in batches to particular orbital planes, making a extra focused and streamlined strategy to constructing out megaconstellations,” Beck mentioned within the assertion.
Rocket Lab had beforehand resisted constructing a bigger car. “There’s no marketplace for it,” Beck mentioned throughout a aspect session of the Smallsat Convention in August 2020. “If you happen to construct a bigger rocket, you relegate your self to being purely rideshare, and rideshare is admittedly well-served.”
“We’re not going to maneuver the needle for anyone” with a bigger rocket providing rideshare companies, he continued. “The place we will transfer the needle is rising the launch cadence of Electron and driving the associated fee down so individuals can use the benefit that devoted launch actually supplies.”
The primary Neutron launch is scheduled for 2024 from the Mid-Atlantic Regional Spaceport at Wallops Island, Virginia. The car will leverage the infrastructure the corporate constructed at Launch Complicated 2 there for the Electron rocket, which is able to make its debut from that pad later this yr. Rocket Lab mentioned it’s “assessing places throughout America” for a manufacturing unit that may deal with large-scale manufacturing of Neutron.
Rocket Lab is a part of a surge of offers involving SPACs, which provide firms a quicker path to going public than the standard preliminary public providing course of. Virgin Galactic merged with a SPAC, Social Capital Hedosophia, in 2019, a deal that raised $460 million for Virgin and allowed it to go public on the New York Inventory Change in October 2019.
Within the final a number of months, 4 different area firms have introduced plans to merge with SPACs. Final fall, in-space transportation firm Momentus and satellite tv for pc communications firm AST SpaceMobile introduced plans to merge with SPACs, offers which have but to shut. In February, small launch car developer Astra and geospatial intelligence firm BlackSky additionally introduced mergers with SPACs.
“I feel that it was the Virgin deal that received most individuals taking a look at SPACs and charging forward,” mentioned James Murray of PJT Companions, an funding banking firm, on the SmallSat Symposium in February. “I don’t suppose that is going to decelerate within the very close to future.”