Rocket Lab is seen as a pioneer among a new generation of small launch suppliers.
Photograph:
Rocket Lab / Associated Press
Space transport startup Rocket Lab USA Inc. is approaching a deal to go public by merging with a special purpose acquisition company as a wave of such businesses moves forward.
Rocket Lab is in negotiations with Vector Acquisition Corp.
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about a deal that would value the US-New Zealand startup at about $ 4.1 billion, including debt, according to people familiar with the matter. The transaction can be finalized on Monday, assuming the negotiations do not fall apart.
Vector Acquisition, supported by the privately held technology company Vector Capital,
raised $ 300 million in an initial public offering in September. It is one of hundreds of SPACs that go public without a business and then look for one or more to combine, to raise money in the past few months, when a wave of blank checks has washed over Wall Street and Silicon Valley.
Rocket Lab, whose sponsors included defense giant Lockheed Martin Corp., is seen as a vanguard among a new generation of small launch suppliers. The startup has already launched 97 satellites for government and private companies for applications that include research and communications. While a handful of established companies, including Elon Musk’s SpaceX focus on sending huge satellites to higher orbits, there are more than 100 new small rocket ventures around the world that aim to serve lighter satellites. In addition to the Rocket Lab, British businessman Richard Branson’s Virgin Orbit LLC is an increasingly important player in the field.
Another entity of Mr. Branson, the space tourism company Virgin Galactic,
went public through a 2019 SPAC merger – putting it at the forefront of the blank check business frenzy.
Rocket Lab’s agreement with Vector is expected to include additional funds of around $ 470 million in the form of so-called private investment in public shares by investors such as BlackRock Inc.
and Neuberger Berman Group LLC, said people familiar with the matter. These investments generally accompany the SPAC business.
Rocket Lab is expected to use the agreement’s funds to finance the development of a medium-sized “Neutron” launch vehicle, adapted for use in satellite megaconstellations, space missions and commercial space flights, people said. The Neutron rocket should be able to lift most satellites due to launch in the coming years and be positioned as a low-cost alternative to larger vehicles, they said.
Rocket Lab also has ambitions for negotiation. In fact, industry officials predict that a jolt may eventually leave only a handful of survivors among small launch suppliers.
Write to Cara Lombardo at [email protected]
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Published in the print edition of March 1, 2021 as ‘Startup of space transport approaching agreement to go public The rocket laboratory closes deal for merger with blank check’.