Rocket Lab Nears Deal To Go Public Via Merger With SPAC Vector Acquisition: WSJ

Space-transportation startup Rocket Lab USA Inc. is nearing a deal to go public through a merger with special purpose acquisition company Vector Acquisition Corp. VACQ, the Wall Street Journal reported Sunday, citing people familiar with the matter.

What Happened: According to the WSJ report, the deal could value the small-satellite launch firm at about $4.1 billion, including debt, and could be finalized by Monday. The deal comes amid a wave of SPAC mergers on Wall Street in recent months.

San Francisco, California-based Vector Acquisition raised $300 million through an initial public offering in September last year. The SPAC is backed by technology-focused private equity firm Vector Capital.

Rocket Lab, like British billionaire Richard Branson’s Virgin Orbit LLC, is focused on launching smaller satellites into space, while Tesla Inc. TSLA CEO Elon Musk’s SpaceX sends heavier satellites into higher orbits.

SpaceX raised $850 million in a funding round in early February that valued the company at $74 billion.

Branson’s other entity, Virgin Galactic Holdings, Inc. SPCE, went public through a SPAC merger in 2019. Last week, the space tourism company reported a net loss for the fourth quarter that narrowed from the prior year despite nil revenue.

See Also: 3 Former SPACs Report Earnings: What Fisker, Velodyne Lidar, Virgin Galactic Investors Should Know

Why It Matters: Rocket Lab has already launched 97 satellites for the government and for private companies, according to the company’s website. The startup’s backers include defense giant Lockheed Martin Corp. LMT.

Rocket Lab could reportedly use the proceeds from the deal to fund the development of a medium-lift Neutron launch vehicle to be used for satellite mega-constellations, space missions, and commercial spaceflight. The rocket could be positioned as a lower-cost alternative to larger vehicles.

The company is also developing the Photon Spacecraft for the NASA moon mission.

Price Movement: Vector Acquisition closed almost 0.7% lower on Friday at $10.25.

Photo courtesy: Rocket Lab USA Inc.