Virgin Orbit, the responsive launch and space solutions company, through its parent company Vieco USA, and NextGen Acquisition Corp. II (NextGen), a special purpose acquisition company, have entered into a definitive merger agreement under which Virgin Orbit will become a publicly-traded company.
Upon closing, the transaction is expected to provide the combined company up to $483 million in cash proceeds, including up to $383 million of cash held in the trust account of NextGen and a $100 million fully committed PIPE; the combined company will retain the Virgin Orbit name and is expected to be listed on Nasdaq under the ticker symbol “VORB.”
The transaction values Virgin Orbit at an implied pro forma enterprise value of approximately US$3.2 billion and is expected to close in the fourth quarter of 2021, subject to approval by NextGen’s shareholders. The combined company is expected to receive approximately $483 million of gross proceeds from the combination of approximately $383 million of cash held in NGCA’s trust account (assuming no redemptions) and a fully committed common stock PIPE offering of $100 million at $10.00 per share.
Proceeds from the business combination and PIPE transaction are expected to provide growth capital to further scale rocket manufacturing to meet customer demand and to fund growth in its space solutions business and Virgin Orbit’s ongoing product development initiatives.
Virgin Orbit’s existing shareholders – Virgin Group, Mubadala Investment Company as well as management and employees – will roll 100% of their equity into the combined company. Assuming no redemptions by NextGen’s shareholders, existing Virgin Orbit shareholders are expected to retain ownership of approximately 85% of the combined company, NextGen’s public shareholders are expected to own approximately 10% of the combined company, with PIPE investors and the SPAC sponsor expected to own approximately 3% and 2%, respectively.
Since its founding in 2017, Virgin Orbit has developed the world’s first air-launched, liquid-fuelled launch system. The company’s most recent successful launch – conducted on June 30, 2021 – precisely delivered satellites for commercial and national security customers from the US and abroad directly into their target orbits. In January 2021, Virgin Orbit successfully launched satellites for NASA.
“The Virgin Orbit team has proven its ability to create new ideas, new approaches, and new capabilities,” said Sir Richard Branson, the Founder of Virgin Orbit. “They are building on the incredible foundation of their rapid transition into successful commercial launch operations to find new ways to solve big problems that uplift our customers’ amazing ideas, again and again. I’m very excited we are taking Virgin Orbit public, with the support of our partners at NextGen and our other wonderful investors. It’s another milestone for empowering all of those working today to build space technology that will positively change the world.”
Virgin Orbit uses a customised 747 aircraft as a mobile launch site, a flying mission control, and a fully-reusable first stage vehicle. By beginning each mission at approximately 35,000 feet above sea level and already travelling at a high speed, the simple and reliable LauncherOne rocket achieves a significant performance advantage over grounded launch sites while reducing local carbon emissions and acoustic impacts at the launch site when compared to a traditional ground launch.
The mobility of the system also allows Virgin Orbit to bring launch capabilities to dozens of nations that currently have space agencies and satellite industries but no domestic launch capability. The company has been selected by the UK and Brazil to bring launch to those nations’ shores, in addition to Virgin Orbit’s announced launch site in Japan and multiple locations in the United States.
Having already successfully delivered satellites into precisely targeted orbit for the US Department of Defense and other national security customers, Virgin Orbit’s proven technology can also be leveraged to serve a diverse portfolio of defence and national security applications. Virgin Orbit’s ability to launch responsively from any location around the world delivers a valuable deterrent in ensuring the resiliency and replaceability of critical satellite infrastructure assets.
“We’ve built Virgin Orbit in order to change the business of satellite launch and to open space for everyone, globally,” said Dan Hart, the CEO of Virgin Orbit. “Whether it’s engaging with world leaders at the G7 Summit or seeing the smiles on the faces of our international community of customers after our most recent launch, our mission gets more exciting with every step we take. Our success in launch has driven the business forward, and now we expect this investment will enable us to build on our R&D efforts and our incredible team. We are driving innovation with world-class design and advanced manufacturing capabilities, our unrivalled mobility of launch, and our exciting space solutions services.”
George Mattson and Greg Summe, the Co-Founders of NextGen, said: “The space economy is developing rapidly and Virgin Orbit is well positioned to benefit through its ability to competitively launch at any time, from any place on Earth, to any orbit and inclination. This is a truly unique and differentiating capability.”
Virgin Orbit is selectively investing with constellation partners to provide end-to-end, value-added services for Earth Observation and the Internet of Things (IoT) applications, using the “Satellites as a Service” model. Virgin Orbit’s IoT offering will focus on connectivity applications for ship management, aircraft, pipeline monitoring, and intelligent agriculture, which has the potential to help improve efficiency across some of the world’s biggest industries.
Virgin Orbit will seek to expand its Satellite as a Service activities beyond the previously announced investments in innovative satellite companies such as ArQit, HyperSat, and others. Additionally, AE Industrial Partners is facilitating commercial partnerships between Virgin Orbit and its portfolio companies BigBear.ai and Redwire to develop and enhance next generation space solutions offerings.
Credit Suisse is serving as lead financial advisor and lead capital markets advisor to Virgin Orbit and co-lead placement agent for the PIPE transaction. Perella Weinberg Partners and LionTree are also serving as additional financial advisors to Virgin Orbit. Latham & Watkins is serving as legal advisor to Virgin Orbit.
Goldman Sachs the exclusive financial advisor for NextGen and is acting as co-lead placement agent for the PIPE transaction. Rothschild & Co is acting as an additional financial advisor to NextGen. Skadden, Arps, Slate, Meagher & Flom is serving as legal advisor to NextGen. Sullivan & Cromwell is serving as legal advisor to the placement agents.