Virgin Orbit Boeing 747-400 rocket launch platform, named Cosmic Girl, takes off from Mojave Air and Space Port, Mojave on its second orbital launch demonstration in the Mojave Desert, north of Los Angeles. (AP Photo/Matt Hartman, file)

Virgin Orbit Boeing 747-400 rocket launch platform, named Cosmic Girl, takes off from Mojave Air and Space Port, Mojave on its second orbital launch demonstration in the Mojave Desert, north of Los Angeles. (AP Photo/Matt Hartman, file)

Branson’s Virgin Orbit to list in SPAC deal backed by Boeing

The satellite-launch company uses a customized Boeing 747 jumbo jet to launch its reusable rockets.

By Tony Robinson and Justin Bachman /Bloomberg

Richard Branson’s Virgin Orbit agreed to go public through a reverse merger with NextGen Acquisition Corp. II that will value the satellite-launch company at $3.2 billion.

Investors including Boeing Co. and AE Industrial Partners committed $100 million to Virgin Orbit through a private investment in public equity, according to a statement Monday. The merger is expected to provide the new company with $483 million in cash proceeds, bolstering its capital until regular launch operations — and more stable revenue streams — are expected in 2023.

The agreement with NextGen extends a wave of mergers with special-purpose acquisition companies. So-called blank-check companies like NextGen have raised $129 billion globally this year, more than last year’s record $84 billion haul, and the deals are playing an increasingly important role in funding new space ventures. A SPAC transaction involving another launch company, Rocket Lab USA, is set to close this week.

The Virgin Orbit merger is expected to close around year-end. The company will trade on the Nasdaq Stock Market under the ticker symbol VORB and keep the Virgin Orbit name.

Companies including Elon Musk’s Space Exploration Technologies Corp. are remaking the satellite-launch sector by lowering the cost of missions, in part by reusing rockets. That’s creating opportunities for new businesses in space. Virgin Orbit, which uses a customized Boeing 747 jumbo jet to launch its reusable rockets at about 35,000 feet above sea level, is part of that effort. The company was founded in 2017.

On June 30, Virgin Orbit delivered satellites for commercial and national-security customers. The company has $300 million in contracts, Chief Executive Officer Dan Hart said on CNBC. He projected that it would conduct 18 launches in 2023, with the figure growing after that.

“We believe in the importance of the satellite launch market and the capabilities Virgin Orbit brings to the industry,” a Boeing spokesperson said by email.

SPAC transactions have become increasingly difficult to complete, as investors have grown more selective about the private investments in public equity that are typically part of the deals. Lackluster performance by companies that have gone public through SPACs as well as scrutiny from short sellers, activists and regulators also have created hurdles to getting deals done.

Another Branson-backed space company, Virgin Galactic Holdings Inc., went public through a SPAC deal in late 2019. The success of that transaction persuaded Branson to use a reverse merger with Virgin Orbit as well, he said on CNBC. Raising funds with a SPAC is more efficient and less time-consuming than a traditional public offering of stock, he said.

Virgin Orbit can share expertise with Virgin Galactic, which plans to offer trips to space to the general — if well-heeled — public at $450,000 a pop. Branson and five Virgin Galactic employees made a roughly one-hour suborbital trip in July.

Talk to us

More in Herald Business Journal

FILE - A sign at a Starbucks location in Havertown, Pa., is seen April 26, 2022. Starbucks says it will pay travel expenses for U.S. employees to access abortion or gender-confirmation procedures if those services aren't available within 100 miles of a worker’s home. The Seattle coffee chain says, Monday, May 16, 2022, the benefit will also be available to dependents of employees enrolled in its health care coverage. (AP Photo/Matt Rourke, file)
Starbucks will cover travel for workers seeking abortions

Amazon and Tesla also will provide the benefit. Walmart and Facebook have stayed silent.

A barista pours steamed milk into a red paper cup while making an espresso drink at a Starbucks coffee shop in the Pike Place Market, Tuesday, Nov. 10, 2015, in Seattle. It's as red as Santa's suit, a poinsettia blossom or a loud Christmas sweater. Yet Starbucks' minimalist new holiday coffee cup has set off complaints that the chain is making war on Christmas. (AP Photo/Elaine Thompson)
Interfaith group asks Starbucks to drop vegan milk surcharge

They say the practice amounts to a tax on people who have embraced plant-based lifestyles.

FILE - In this Monday, March 1, 2021 file photo, The first Alaska Airlines passenger flight on a Boeing 737-9 Max airplane takes off on a flight to San Diego from Seattle-Tacoma International Airport in Seattle. A Boeing pilot involved in testing the 737 Max jetliner was indicted Thursday, Oct. 14,2021 by a federal grand jury on charges of deceiving safety regulators who were evaluating the plane, which was later involved in two deadly crashes. (AP Photo/Ted S. Warren, File)
Alaska Airlines to keep canceling flights at high level for weeks

Flight cancellations since April will continue. The chaos has been damaging for Seattle’s hometown airline.

FILE - An airplane flies past the Boeing logo on the company's headquarters in Chicago, on Thursday, Dec. 20, 2001. Boeing Co., a leading defense contractor and one of the world's two dominant manufacturers of airline planes, is expected to move its headquarters from Chicago to the Washington, D.C., area, according to two people familiar with the matter. The decision could be announced as soon as later Thursday, May 5, 2022, according to one of the people. (AP Photo/Ted S. Warren, File)
Boeing expected to move headquarters from Chicago to DC area

The move would put Boeing executives close to their key customer, the Pentagon, and the FAA.

This 3D rendering shows Sila's 6000-foot facility in Moses Lake, to be used to manufacture lithium-ion anode battery materials. (Business Wire)
New factory in Moses Lake will bring hundreds of new jobs

The plant will manufacture lithium-ion anode battery materials for cars and cellphones.

Dr. David Kirtley at the new Helion headquarters, Antares, in Everett, Washington on Wednesday, Jan. 19, 2022  (Olivia Vanni / The Herald)
Helion Energy: New Everett company has the sun in its eyes

The firm is the winner of a new award by Economic Alliance Snohomish County, called Opportunity Lives Here.

Marysville Mayor Jon Nehring is this year's winner of the Henry M. Jackson Award given by Economic Alliance Snohomish County. Photographed in Marysville, Washington on April 25, 2022. (Kevin Clark / The Herald)
Jon Nehring: Longtime Marysville mayor who’s nurtured growth

He’s helped steer the city’s transformation and is winner of the Jackson Award by Economic Alliance Snohomish County.

Monti Ackerman, recipient of the John Fluke Award, is pictured Thursday, April 28, 2022, outside his office in Everett, Washington. (Ryan Berry / The Herald)
Monti Ackerman: A passionate volunteer and calculator whiz

The Fortive executive is the winner of this year’s Fluke Award by Economic Alliance Snohomish County.

Rep. Mike Sells, D-38, is the recipient of this year's Henry M. Jackson award. The award recognizes a visionary leader who through partnership, tenacity and a strong commitment to community has created lasting opportunities to improve quality of life and positively impact the regional economy. Photographed in Everett, Washington on April 29, 2022.  (Kevin Clark / The Herald)
Rep. Mike Sells: He fought for WSU Everett and worker rights

The retiring legislator is the recipient of the Floyd Award from Economic Alliance Snohomish County.

People sit outside the recently opened Amazon Go facility Wednesday, April 27, 2022, in Mill Creek, Washington. (Ryan Berry / The Herald)
Cashier-less Amazon Go buzzing in Mill Creek grand opening

Locals came to check out the high-tech store, with $3 avocado toast and cameras watching customers’ every move.

Joel Bervell (Courtesy photo)
TikTok med student @joelbervell named top Emerging Leader

Joel Bervell, who highlights disparities in medicine, took top honors at an event for 12 rising stars in Snohomish County.

The Everett City Council approved a contract for Bird electric scooters to be set up throughout the city as soon as May. (Bird) 20220428
Electric scooters set to return to Everett as soon as May

The Everett City Council approved a 12-month contract with Bird, a California company, to deploy 75 to 300 e-scooters.