Voyager Space Holdings takes majority stake in XO Markets from Nanoracks

Voyager Space Holdings’ fourth acquisition in just over a year since its inception is a controlling stake in parent company Nanoracks, a space services and materiel 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 intends to take a controlling stake in XO Markets, the holding company of Nanoracks, in a deal expected to be concluded in the first quarter of 2021.

Although Voyager Space Holdings did not disclose financial details of the deal – Taylor noting only that “we are putting a lot of money into the business” to help it grow – people familiar with the deal said to CNBC that Voyager planned to invest more than $ 50 million in Nanoracks over the coming year.

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

“We’re an operating company, not a fund, so it’s about how we put the capabilities together,” Taylor said. “Once we have all of these capabilities together, we can have a disproportionate influence on the industry because we are able to perform really complex and important missions in space.

Nanoracks CEO Jeff Manber said he started looking for new capital last summer, including reviewing its IPO through a Special Purpose Acquisition Company, or SPAC. But Manber told CNBC he didn’t want to “spend my next two years” talking to Wall Street investors and “trying to figure out how you were defending this,” rather than staying focused on operations and growth. of his business.

“With Voyager, we have a platform that allows us to become the entire development of service infrastructure in space, with financial sophistication and synergy that we frankly wouldn’t have on our own.” , Manber said. “They give us stability. They give us the platform. They give us some of the expertise that we don’t have today.”

In return, Manber sees Nanoracks “providing the core” of Voyager’s space efforts, with new access to the company’s mission control room in Houston, TX, as well as facilities across the country and talent. who have experience working with a variety of payloads that have gone into space.

The deal also comes after Nanoracks made major milestones in installing its Bishop Airlock on the International Space Station on Saturday. Nanoracks fully funded the development and manufacture of the airlock, launching it into the ISS during a SpaceX cargo mission on December 6.

As the first private airlock, Bishop adds five times the payload capacity of the current, government-run JEM airlock. NASA noted that Bishop’s addition “greatly increases public and private research capacity,” which “also allows for the deployment of larger satellites and the transfer of tools and equipment from space walking to space. ‘inside and outside the station “.

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

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

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

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

But “the space station is getting old,” Manber said, so he wants Nanoracks to be involved in “market-driven private space stations” in the future. He expects “small private space stations”, each focused on individual markets, to be launched in the coming decade, with “some hotels and others for professional astronauts.” So Nanoracks’ “second pillar” is its outpost program, which plans to reuse the large fuel tanks left behind from rockets that orbit the Earth in small space stations.

Nanoracks’ first demonstration of Outpost technology, called Mars Demo-1, is slated for a SpaceX ridesharing launch in June 2021. The mission will use a robotic arm to cut metal in space, to demonstrate that Nanoracks can cut through Rocket fuel tanks safely to turn them into orbiting hubs. Manber hopes Nanoracks will then launch a follow-up mission in 2023, and then “every year will stay in space longer and longer and convert these otherwise empty platforms.”

“The third pillar is to become a customer of space research,” said Manber. “Space research is a market totally dominated by the government, funded by space agencies with the occasional participation of a commercial company such as a pharmaceutical company or [agricultural] technology 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 “an imitation of what SpaceX does”, taking a core business and expanding it steadily.

“This industry is getting very serious now, and it’s a big business from a business standpoint, ‘Manber.’ [Nanoracks] I’ve spoken to a number of family funds and hedge funds, plus I’ve looked at it and become aware of how the industry is changing. “

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

Taylor said one downside to starting an operating company is that “you really can’t do more than four transactions a year efficiently or productively” because Voyager doesn’t create “a portfolio of brands.” but rather works to integrate them in a coherent way. whole. Nonetheless, Taylor said Voyager has about a dozen acquisitions “in our pipeline at various stages of diligence” and that it plans to announce two or three more by the summer of 2021.

“And then it’s still our desire … to try to go public at the end of next year,” Taylor said.

He intends to bring Voyager to the public through the traditional route of the IPO, saying he believes “it helps to go through the S-1 process.”

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

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