Virgin Orbit taking an equity stake in Horizon Technologies


Virgin Orbit investing in startups as SPAC merger wraps up by

by Jeff Foust – December 27, 2021

SANTA FE, N.M. — As Virgin Orbit prepares to complete its merger with a special purpose acquisition company (SPAC), the launch provider has announced a series of partnerships and investments to diversify its business.

Shareholders in NextGen Acquisition Corp. II are scheduled to vote Dec. 28 on its merger with Virgin Orbit announced Aug. 23. Such votes are usually the final step in closing a SPAC deal, turning Virgin Orbit into a publicly traded company on the Nasdaq.

When the merger was announced, the companies expected the deal to raise up to $483 million, of which $383 million was from the proceeds of the SPAC and $100 million in a private investment in public equity (PIPE) round that included AE Industrial Partners and Boeing as investors. That amount, though, is contingent on the amount of redemptions, where shareholders of the SPAC ask for their money back than hold shares in the merged company.

Virgin Orbit and NextGen announced Dec. 23 that the Virgin Group had agreed to invest up to $100 million as an additional PIPE. The companies said that specific amount “will be determined by the amount of investment, if any, required to satisfy the minimum cash condition as defined in the merger agreement.”

“This investment will ensure that Virgin Orbit has the capital required to go and build upon its incredible foundation and continue its rapid transition into a successful commercial space launch company,” Virgin Orbit founder Richard Branson said in the statement.

The co-founders of NextGen, George Mattson and Gregory Summe, said in the statement that the commitment from the Virgin Group means “we believe we have a clear path to a successful closing of our merger” pending the shareholder vote on Dec. 28.

As the SPAC merger closes, Virgin Orbit has been announcing a series of investments and partnerships with satellite manufacturer and operator startups. Among the announcements was a $30 million Series B investment by Virgin Orbit into Polish company SatRevolution Dec. 14, valuing that company at $150 million. SatRevolution is developing a smallsat constellation of imaging satellites and has launched some of its satellites on Virgin Orbit’s LauncherOne.

Virgin Orbit announced Dec. 15 it is taking a 17.5% stake in Hypersat, a Virginia-based geospatial analytics company developing a constellation of hyperspectral imaging satellites that will be launched by Virgin Orbit. The companies did not disclose the dollar value of that investment.

On Dec. 21, Virgin Orbit said it was taking an equity stake in Horizon Technologies, a British company developing satellites for maritime domain awareness. Virgin Orbit will be the preferred launch provider for Horizon’s satellites.

Those investments join earlier ones Virgin Orbit made in Sky and Space Global, a company working on a constellation of communications satellites, and Arqit, a British quantum computing company. Arqit announced Dec. 23 that it signed a contract for two dedicated LauncherOne launches of satellites that will support its quantum encryption technology.

Those investments, Virgin Orbit executives say, fit into the company’s strategy to expand beyond launch services into broader space services, such as communications and imaging. “As we grew up as a launch company and interacted across the community,” said Dan Hart, chief executive of Virgin Orbit, during a panel discussion at World Satellite Business Week Dec. 15, “we were invited by multiple companies to participate in their business and to take a share.”

That led to the development of a strategy for a satellite solutions business line that includes those investments. “We can get capacity, we can participate with our customers in their business, and we can integrate and create another level of information and capability to deliver to customers,” he said. “We are moving into that satellite solutions part of the space economy while we build up our launches for commercial, national security and civil space.

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FLYING Article:

Virgin Orbit Satellite Launch Company Set to Go Public

Founder Richard Branson will ring NASDAQ opening bell on January 7.

Sir Richard Branson’s Virgin Orbit, a satellite launch and services company, will officially become a publicly traded company following its merger with special purpose acquisition company (SPAC) NextGen Acquisition Corp. II (NASDAQ: NGCA). The merger, which was approved by NextGen’s shareholders in a proxy vote Tuesday, allows Virgin Orbit to be listed on the Nasdaq stock exchange as “VORB.”To commemorate the listing, Branson and Virgin Orbit executives will ring the opening bell at the Nasdaq exchange on January 7, 2022.

In a statement Tuesday, Branson singled out Virgin Orbit CEO Dan Hart, a former Boeing vice president of government satellite systems, in addition to the wider team, NextGen partners, and other investors.

“Thanks to Dan and his world-class team, along with the support of our partners at NextGen and other investors, Virgin Orbit is well-positioned to continue revolutionizing satellite launch and building unrivalled space technology that we believe will positively change the world. With a diverse and global customer base, it is the only launch company that can go anytime, from anywhere, to any orbit,” Branson said.

Following the announcement, the Virgin Group said it would purchase up to $100 million of Virgin Orbit’s common stock and PIPE investment, in a move to infuse the company with the capital it will need to support its operations.

“The capital raised through this transaction combined with our new access to the public markets, will enable us to scale rocket manufacturing and extend our space solutions business and product development while we continue to expand globally through key partnerships with customers worldwide,” Dan Hart said.

The merger with NextGen is valued at approximately $3.2 billion, and proceeds of the deal yield approximately $228 million to fund growth, of which $68 million came from trust proceeds while the other $160 million came from PIPE investors including, Boeing (NYSE: BA), AE Industrial Partners, Mubadala Investment company, and sponsors of NextGen. It is important to note, that when the SPAC merger was announced in August, the company projected that it would raise as much as $483 million, which means this actual yield is far from their target.

Meanwhile, George Mattson and Gregory Summe, the co-founders of NextGen, said that Virgin Orbit’s “differentiated technology drives huge benefits to customers in the national security, civil, and commercial markets around the world. We are excited to help Virgin Orbit progress into the next chapter of its exciting journey as a public company.”

Cosmix Girl’ and ‘LauncherOne’

Since its inception in 2017, Virgin Orbit has launched 19 satellites and has customers across the civil, commercial, international, and national security sectors. Some customers include NASA, the U.S. Department of Defense, the Royal Netherlands Air Force, and Polish company SatRevolution.

Virgin Orbit uses a customized Boeing 747 aircraft as a mobile launch site, a flying mission control, and a fully reusable first-stage vehicle. Each mission begins at approximately 35,000 feet above sea level, and given the incumbent speed of the jet, its LauncherOne designed rocket that carries smallsat payloads, is deployed from the 747, dubbed Cosmic Girl. On January 17 this year, it completed its first successful flight, delivering a payload of 10 CubeSats to low Earth orbit.

What’s next: Demonstrator flight, international collaboration, space solutions services

Looking ahead, the company is planning to complete three launches in January 2022 in a mission dubbed “Above the Clouds” for three new customers—the U.S. Department of Defense, SatRevolution and Spire Global (NYSE: SPIR)—and said in its announcement that it has already completed rehearsal for that flight when the launch window opens on January 12, 2022.

Additionally, the company has entered into multiple agreements with other companies and international spaceports to conduct a variety of missions that will see it tackle space debris mitigation, exploration, environmental monitoring, and national security.

Notably, ANA holdings, the parent company of Japan’s largest airline, plans to use LauncherOne for 20 flights from Japan’s Oita Prefecture.

Finally, the company is diversifying its offering to provide a more compelling product line for future customer, as it indicated when it announced in early December that it was investing in other space solutions companies such as quantum encryption company Arqit (NASDAQ: ARQQ), marine intelligence company Horizon Technologies, and geospatial analytics company HyperSat.

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