LONDON – Virgin Orbit, by Richard Branson, has hired bankers to help make it public this year through a special-purpose acquisition company, with the aim of an appraisal for start-up of the satellite of up to $ 3 billion, according to people familiar with the subject.
The measure represents Mr Branson’s latest effort to take advantage of a recent boom in similar blank checklists. Her group Virgin has played on both sides of fashion SPAC: in 2019 it listed its space tourism company, Virgin Galactic Holdings Inc.,
SPCE 2.89%
merging it with a SPAC, essentially a money fund with a stock market listing.
In February, a blank check company backed by Virgin said it would merge with 23andMe Inc. in an agreement that valued the genetic testing company at $ 3.5 billion, including debt.
Mr. Branson’s two American space companies, Virgin Orbit and Virgin Galactic, have been bright spots in an anti-pandemic empire. The spread of the new coronavirus and the resulting blockades around the world have affected the airlines, tourism and gym companies that are the core of Virgin Group.
Virgin Orbit has hired Credit Suisse Group AG and LionTree LLC and is buying a SPAC merger partner that can make it public with a value ranging from $ 2.5 billion to more than $ 3 billion, according to people familiar with the matter. .
Mr. Branson’s company owns 80% of Virgin Orbit, with Mubadala Investment Co., the sovereign wealth fund of the United Arab Emirates, owning the rest.
Private companies are flooding special-purpose acquisition companies, or SPACs, to avoid the traditional IPO process and get a public listing. WSJ explains why some critics say investing in these so-called blank check companies is not worth it. Illustration: Zoë Soriano / WSJ
The target valuation will mark a significant jump from the $ 1 billion that was launched at the launch of the rocket last year, from a previously planned private fundraiser. The company has not yet ruled out any private fundraising, but is now focused on a SPAC, these people said.
Reaching the target valuation is far from guaranteed. Virgin Orbit has yet to reach an agreement with a specific SPAC to make a deal and then secure the additional external investment that usually accompanies a SPAC merger.
Virgin Orbit is looking for a higher rating after a successful launch of one of its satellite carrier rockets in January. That flight turned the company into a small group of small satellite launch providers capable of offering flight-tested hardware.
The Southern California-based company uses an exclusive launch method from its competitors. A converted jumbo jet releases a rocket, which then fires and transports its payload of small satellites into orbit.
Virgin Orbit’s focus on a merger with an SPAC comes as investors are increasingly betting on falling space access costs for commercial, tourism and scientific research to fuel industry growth.
SPACs have proven to be a popular route for space-related startups. In February, Astra Space Inc. agreed to merge with Holicity Inc.,
a SPAC backed by billionaire telecommunications investor Craig McCaw, which will be listed on the Nasdaq stock market. The bond values the private launch of the rocket launch at $ 2.1 billion including debt.
Momentus Inc., a technology developer to propel small satellites into orbit, agreed in October to merge with Stable Road Acquisition Corp.
, a SPAC, which will be made public on the Nasdaq, valuing it at $ 1.2 billion including debt. And in December, AST & Science LLC agreed to merge with New Providence Acquisition Corp.
, another SPAC. The deal valued the builder of a space-based cellular broadband network at $ 1.4 billion including debt.
Write to Alistair MacDonald to [email protected] and Ben Dummett to [email protected]
Corrections and amplifications
Virgin Orbit is headquartered in Southern California. An earlier version of this article incorrectly called it a South Carolina-based company. (Corrected on March 12)
Copyright © 2020 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8
It appeared in the March 13, 2021 print edition as “Branson explores a SPAC listing for its satellite launch.”