Virgin Orbit to go public through merger with NextGen Acquisition Corp. II

  •   06/09/2021 - 07h59
  •   DEHOUI Lionel

Virgin Orbit has introduced one of the most responsive and flexible satellite launchers ever invented. It is the LauncherOne launch service that it operates. The service is used for small government and commercial satellites. The company has just entered into a definitive merger agreement that will make it a publicly traded company. The agreement was signed between its parent company Vieco USA, Inc. and NextGen Acquisition Corp.

Virgin Orbit to go public through merger with NextGen Acquisition Corp. II

The terms of the merger agreement between Virgin Group and NextGen

Once the deal is completed, the combined company will benefit from up to $483 million in cash proceeds from the transaction. This amount is made up of a fully committed PIPE of $100 million and $383 million in cash sitting in NextGen's trust account. The $100 million is being invested by US giant Boeing.

Virgin Orbit also counts AE Industrial Partners as an investor in its private financing. Under the terms of the deal, the joint venture is expected to be listed on NASDAQ under the ticker symbol "VORB" and will be known as Virgin Orbit.

The transaction values Virgin Orbit at an implied pro forma enterprise value of approximately US$3.2 billion. The deal is expected to close in Q4/2021, subject to approval by NextGen shareholders. The various companies involved in this deal are also awaiting other closing conditions commonly seen in the market (satisfaction or waiver).

 

About the capital of the joint venture or combined company

Virgin Orbit already has several shareholders who are typically very active in the market. Its shareholder base consists of Mubadala Investment Company (i.e. "Mubadala") and Virgin Group (i.e. "Virgin"). It also includes employees and management. The joint venture will benefit from the full equity invested by the existing Virgin Orbit shareholders.

At the same time, 10% of the capital of the joint venture (combined company) will be held by NextGen's public shareholders in the absence of any buy-out by them. Under the same conditions, more than 85 % of the combined company will be held by the existing shareholders of Virgin Orbit. Sponsor SPAC and PIPE investors are expected to own 2% and 3% respectively of the combined company upon completion of the agreement.

Note: SPAC(Special Purpose Acquisition Company) is a company that has no operational activity. However, its securities are issued on the stock exchange for a well-defined period of time (limited duration). Their objective is to make one or more acquisitions in a specific sector.

 

Virgin Orbit, a major competitor for the big players

In the current context of the small satellite launch market, Richard Branson's company is taking on the mantle of competitor to Rocket Lab and Firefly. The market is currently booming and the players expect a strong progression in the coming years. Virgin Orbit has already proven its ability to create new ideas, new potential and innovative approaches.

Its experts are able to find new ways to tackle the big challenges that drive the amazing ideas of its customers. This agreement brings Virgin Orbit to the public through NextGen's partners and several other investors.