Virgin Orbit and blank check company NextGen Acquisition Corp. II (Nasdaq: NGCA) have agreed to merge that would result in the satellite launch services provider becoming a publicly traded company with an enterprise value of approximately $3.2 billion.
The boards of directors of Virgin Orbit and NextGen have cleared the transaction and both parties expect the transaction to close around the end of 2021, pending approval by NextGen’s shareholders and other customary closing conditions, the companies said in a joint release published Monday.
The combined company will operate as Virgin Orbit that will trade on Nasdaq under the ticker symbol “VORB” and is expected to receive up to $483 million in gross proceeds, including $100 million in fully committed private investment in public equity offering led by Boeing (NYSE: BA), AE Industrial Partners and other strategic investors.
Virgin Orbit is the maker of LauncherOne rockets that can be air-launched from a customized 747-400 carrier aircraft to bring government and commercial small satellites into space. The company has launched satellites for the Department of Defense and other national security clients.
Virgin Orbit CEO Dan Hart said the company expects the transaction to help build up its research and development efforts as it works to drive innovation with its manufacturing capabilities, launch mobility and space services.
Virgin Group, Mubadala Investment and other Virgin Orbit’s existing shareholders will roll 100 percent of their equity and are expected to keep ownership of about 85 percent of the combined company, assuming no redemptions by NextGen shareholders. Public shareholders will hold a 10 percent stake, while PIPE investments and the SPAC sponsor will have a 3 percent and 2 percent stake, respectively, in the combined entity.
Credit Suisse Securities (USA) serves as lead financial and capital markets adviser to Virgin Orbit and co-lead placement on the PIPE transaction. Latham & Watkins acts as legal counsel to Virgin Orbit, while LionTree and Perella Weinberg Partners serve as additional financial advisers to the launch services company.
Goldman Sachs & Co. acts as exclusive financial adviser to NextGen and co-lead placement agent for the PIPE. Rothschild & Co. and Skadden, Arps, Slate, Meagher & Flom serve as financial and legal advisers, respectively, to NextGen.