Branson's Virgin Orbit to go public through a SPAC at $3.7 billion valuation

Virgin Orbit, the satellite-launching spinoff off of Sir Richard Branson’s Virgin Galactic, is preparing to go public, announcing Monday that it will merge with a SPAC to list on the Nasdaq.

The company is combining with special purpose acquisition company NextGen Acquisition Corp. II, as CNBC reported in June. It trades on the Nasdaq under ticker “NGCA,” until the expected close of the transaction near the end of the year, when the shares will convert to “VORB.”

The SPAC — co-led by George Mattson, who previously co-led Goldman Sachs’ global industrials group, and former PerkinElmer chairman and CEO Gregory Summe — values Virgin Orbit at $3.7 billion in equity.

The deal is expected to raise $483 million for Virgin Orbit, including a $100 million PIPE round – or private investment in public equity – raised by investors such as Boeing and private equity firm AE Industrial Partners.

A spinoff of Branson’s space tourism company Virgin Galactic, the company is privately held by Branson’s multinational conglomerate Virgin Group, with a minority stake from Abu Dhabi sovereign wealth fund Mubadala — which together have invested about $1 billion in Virgin Orbit to date.

The company uses a modified Boeing 747 aircraft to launch its rockets, a method known as air launch. Rather than launch rockets from the ground, like competitors such as Rocket Lab or Astra, the company’s aircraft carries its LauncherOne rockets to about 45,000 feet altitude and drops them just before they fire the engine and accelerate into space – a method the company touts as more flexible than a ground-based system.

LauncherOne is designed to carry small satellites that weigh up to 500 kilograms, or about 1,100 pounds, into space. Virgin Orbit completed its first successful launch in January and its second in June.

Virgin Orbit aims to be profitable on an EBITDA-basis by 2024. The company says it has about $300 million in active contracts, with another $2.3 billion in “identified sales opportunities currently being pursued.”

The company expects to have about $15 million in revenue this year, with an EBITDA loss of $156 million. But Virgin Orbit aims to grow that revenue quickly in the coming years, forecasting $2.1 billion in revenue by 2026.

Virgin Orbit joins a trend of space companies going public through SPAC deals, with Virgin Galactic the first of the recent generation in 2019. Rocket builder Astra, satellite broadband focused AST & Science, satellite data service Spire Global, and space delivery specialist Momentus have each begun trading, with Rocket Lab expected to debut on Wednesday and BlackSky, Redwire, Satellogic, and Planet, expected to follow in the coming months.