Voyager Space Holdings will acquire a majority stake in Nanoracks XO Markets

Voyager Space Holdings’ fourth acquisition in just over a year since its inception is a majority stake in the parent company of Nanoracks, an aerospace and hardware specialist that has sent more than 1,000 missions to the International Space Station.

“Nanoracks is a game changer for us in terms of adding some pretty significant capacity into space,” Voyager Space Holdings CEO Dylan Taylor told CNBC.

Voyager plans to take a majority stake in XO Markets, Nanoracks’ holding company, in a deal expected to close in the first quarter of 2021.

Although Voyager Space Holdings did not disclose the financial details of the deal – with Taylor only noting that “we’re putting quite a bit of money into the business” to grow it, people familiar with the transaction told CNBC that Voyager is planning to invest more than $ 50 million in Nanoracks over the next year.

The majority stake in XO Markets is Voyager’s fourth deal since its inception in October 2019. The company previously acquired rocket and space specialist The Launch Company, satellite maintenance company Altius Space Machines and Pioneer Astronautics, the research and development company of Dr. Robert Zubrin, best known for his talks with SpaceX CEO Elon Musk about establishing a permanent human presence on Mars.

“We’re an operating company, not a fund, so this is about how we pool capacity,” Taylor said. “Once we have gathered all these capabilities, we could have too much of an influence on the industry because we are able to carry out really complex and important missions in space.”

Nanoracks CEO Jeff Manber said he was looking for new capital last summer, including an investigation into the IPO through a specialty acquisition company, or SPAC. But Manber told CNBC he didn’t want to talk “ my next two years ” to Wall Street investors and “ try to figure out how to go about this, ” rather than stay focused on running and growing his business.

“With Voyager, we have a platform that allows us to grow into the full development of space services infrastructure with a financial sophistication and synergy that we honestly wouldn’t have on our own,” said Manber. “They give us the stability. They give us the platform. They give us some of the expertise that we don’t have today.”

In return, Manber sees Nanoracks “at the heart” of Voyager’s space efforts, with new access to the company’s control room in Houston, Texas, as well as facilities nationwide and talent experienced working with a variety of charges that have gone to space.

The deal also comes after Nanoracks hit key milestones in installing his Bishop Airlock on the International Space Station on Saturday. Nanoracks fully funded the development and production of the airlock and launched it to the ISS during a December 6 SpaceX cargo mission.

The very first ever private airlock, Bishop adds five times the payload of the current government-operated JEM airlock. NASA noted that the addition of Bishop “significantly increases the capacity for public and private research,” which “also allows for the deployment of larger satellites and the transfer of spacewalk tools and hardware inside and outside the station.”

“Nanoracks is the largest commercial user of the International Space Station,” said Manber. “We’re the guys on the space station – we understand space stations better than probably any commercially emerging company in the world.”

Nanoracks has approximately 70 employees worldwide, with headquarters in Houston. The company also has offices in Washington, DC, as well as offices in Turin, Italy and Abu Dhabi in the United Arab Emirates.

Manber sees the growth of Nanoracks in a three-pillar strategy, the first of which is the current use of the ISS.

“Bishop’s airlock is our biggest growth catalyst,” said Manber.

But “the space station is aging,” Manber said, so he wants Nanoracks to be involved in “private space stations that are market-oriented.” He expects that in the next decade, “small private space stations”, each targeting individual markets, will be launched, with “some hotels and some for professional astronauts”. So the “second pillar” of Nanoracks is the Outpost Program, which plans to convert the large discarded fuel tanks with rockets orbiting Earth into small space stations.

The first demonstration of Nanoracks’ Outpost technology, called Mars Demo-1, is scheduled to fly on a SpaceX ride launch in June 2021. The mission will use a robotic arm to cut metal material in space to demonstrate that Nanoracks rocket fuel tanks can cut safely. to turn them into orbit around the Earth. Manber hopes that Nanoracks will launch a follow-up mission in 2023 and then “stay in space longer and longer every year and rebuild these otherwise empty platforms.”

“The third pillar is to become a customer of in-space research,” said Manber. “In-space research is a market that has been completely government-dominated, funded by space agencies with incidental involvement of a commercial company such as a pharmaceutical company or [agricultural] tech company. “

Nanoracks’ space research service would help more companies “use the harsh environment of space to create new products.”

Manber described his three-pillar strategy as “emulating what SpaceX does,” taking a core task and then building on it steadily.

“This industry is getting very serious now, and it’s an important industry from a commercial standpoint,” Manber. The more [Nanoracks] spoke to a number of family funds and hedge funds, the more I looked at it and realized how the industry is doing. “

Joining Voyager is Manber’s way of “aligning” Nanoracks so that it doesn’t have a single project or program it depends on for success.

Taylor stated that one downside to building an operating company is that ‘you really can’t do more than four deals a year effectively or productively’ as Voyager doesn’t create a ‘brand portfolio’, but rather works to integrate them as a cohesive whole. Nonetheless, Taylor said Voyager has about a dozen acquisitions “in our pipeline under different phases of commitment,” and expects to announce two or three more by the summer of 2021.

“And then it’s still our wish … to try and go public sometime late next year,” Taylor said.

He plans to route Voyager to the public via the traditional IPO route and says he thinks it is “worthwhile going through the S-1 process.”

In the meantime, Voyager is looking for companies that build spacecraft components, as well as specialists in software – also known as GNC, or guidance, navigation, and control. Taylor says Voyager will eventually “look at a launch opportunity,” meaning a rocket builder like SpaceX or Rocket Lab, but he doesn’t expect it to happen in the coming year.

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