Branson's Virgin Orbit to go public through $3.2 billion SPAC merger

[August 23, 2021]  (Reuters) -Billionaire Richard Branson's Virgin Orbit is going public through a merger with a blank-check vehicle in a deal that values it at $3.2 billion and includes an investment from Boeing Co, it said on Monday.

Richard Branson, founder of Virgin Group, poses for a photograph on board of his new cruise liner, the Scarlet Lady at Dover Port in Dover, Britain, February 21, 2020. REUTERS/Simon Dawson

The small satellite launch service provider's deal with NextGen Acquisition Corp. II also includes a private investment in public equity (PIPE) of $100 million. Boeing and AE Industrial Partners participated in the PIPE round, besides other investors.

Shares of NextGen were up 2.4% in premarket trading.

Firefly, U.S.-New Zealand startup Rocket Lab, and Branson's Virgin Orbit are seen as front-runners in a new breed of firms building miniaturized launch systems to cash in on the exponential growth of compact satellites, expected in the coming years.

These firms offer a unique "air-launch" method of sending satellites to orbit with small-launch systems.

Blank-check companies, also known as special purpose acquisition companies (SPACs), use capital they raise through an initial public offering to merge with a private firm and take it public.

Virgin Orbit, which was spun-off from Branson's space tourism company Virgin Galactic Holdings Inc in 2017, reached space for the first time in January when it delivered ten NASA satellites to orbit, after a failed attempt last year.

The company is led by aviation veteran Dan Hart, a former executive at Boeing. Virgin Orbit's government services unit VOX Space LLC is selling launches to the U.S. military. The company won a $35 million U.S. Space Force contract for three missions last year.

The deal with NextGen Acquisition is expected to provide $483 million in proceeds for the combined company. Virgin Orbit will list on the Nasdaq, post the closing of the merger, under the ticker symbol "VORB".

(Reporting by Niket Nishant and Sanjana Shivdas in Bengaluru; Editing by Shailesh Kuber)

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