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Rocket Lab is considered a pioneer among a new generation of so-called small launchers suppliers.
Photo:
Rocket Lab / Associated press
Space transportation startup Rocket Lab USA Inc. is set to close a deal to go public by merging with a special purpose 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 New Zealand start-up at around $ 4.1 billion, including debt, according to people familiar with the matter. The deal could be finalized by Monday, assuming negotiations don’t collapse.
Vector Acquisition, backed by technology-driven private equity firm Vector Capital,
raised $ 300 million in an initial public offering. It’s one of hundreds of PSPCs, going public without a business, then looking for one or more to combine, to raise funds in recent months, as a wave of blank checks has gripped Wall. Street and Silicon Valley.
Rocket Lab, whose backers have included defense giant Lockheed Martin Corp., is seen as a pioneer among a new generation of so-called small-launch vendors. The startup has already launched 97 satellites for government and private companies for applications such as 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 companies around the world that aim to serve lighter satellites. In addition to Rocket Lab, British entrepreneur Richard Branson’s Virgin Orbit LLC is a growing player in the field.
Another entity of Mr. Branson, the space tourism company Virgin Galactic,
went public through a PSPC merger in 2019, which puts it at the forefront of the blank check contract frenzy.
Rocket Lab’s deal with Vector is expected to include additional funds of around $ 470 million in the form of a so-called private investment in public stocks from investors, including BlackRock. Inc.
and Neuberger Berman Group LLC, those familiar with the matter said. Such investments often accompany PSPC agreements.
Rocket Lab is expected to use the proceeds from the deal to fund the development of a “Neutron” transportation launcher designed for use in satellite mega-constellations, space missions and commercial spaceflight, the sources said. The neutron rocket should be able to lift most of the satellites expected to be launched in the coming years and be positioned as a cheaper alternative to larger vehicles, they said.
Rocket Lab also has negotiating ambitions. Indeed, industry officials predict that a shake could eventually leave only a handful of survivors among suppliers of small launchers.
Write to Cara Lombardo at [email protected]
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Appeared in the March 1, 2021 print edition under the headline “ Space transport startup nears deal to go public Rocket Lab is about to merge with a blank check. ”
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