Rocket Lab is seen as a leader among a new breed of so-called small-launch providers.
Photo:
Rocket Lab / Associated Press
Aerospace Startup Rocket Lab USA Inc. nears an agreement to go public by merging with a specialty acquisition company, as a wave of such deals continues.
Rocket Lab is in talks with Vector Acquisition Corp.
VACQ -0.68%
on a deal that would value the US-New Zealand start-up at about $ 4.1 billion including debt, according to people familiar with the case. The transaction could be closed by Monday, assuming talks don’t fall apart.
Vector Acquisition, backed by technology-focused private equity firm Vector Capital
raised $ 300 million in an IPO in September. It’s one of hundreds of SPACs, going public without a company and then looking for one or more to pair with, to raise money in recent months when a blank check hit Wall Street and Silicon Valley.
Rocket Lab, which includes defense giant Lockheed Martin Corp. is seen as a leader among a new breed of so-called small-launch providers. The startup has already launched 97 satellites for the government and private companies for research and communications, among other things. While a handful of established companies, including Elon Musk’s SpaceX, are focused on sending massive satellites into higher orbits, there are more than 100 new small rocket projects around the world aimed at operating lighter satellites. In addition to Rocket Lab, Virgin Orbit LLC of British entrepreneur Richard Branson is becoming an increasingly important player in the field.
Another entity of Mr. Branson, space tourism company Virgin Galactic
went public through a 2019 SPAC merger – putting it at the forefront of the blank-check deal frenzy.
Rocket Lab’s deal with Vector is expected to include additional funds of approximately $ 470 million in the form of a so-called private investment in public equity from investors, including BlackRock. Inc.
and Neuberger Berman Group LLC, the people familiar with the case said. Such investments often come with SPAC deals.
Rocket Lab is expected to use the proceeds from the deal to fund the development of a “Neutron” mid-lift launch vehicle adapted for use in mega-constellations, space missions and commercial space flights, the people said. The Neutron missile is expected to be able to lift most of the satellites that will launch in the coming years and be positioned as a cheaper alternative to larger vehicles, they said.
Rocket Lab also has ambitions to make deals. Indeed, industry officials expect that a shakeout will ultimately only leave a handful of survivors among small launch providers.
Write to Cara Lombardo at [email protected]
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Appeared in the March 1, 2021 print edition as ‘Space-Transport Startup Nears Agreement To Go Public Rocket Lab Approaches Deal To Merge With Blank Check’.