UK billionaire Branson's 'Virgin Orbit' to go public via SPAC merger

"Corporate Value Estimated at 3.8 Trillion KRW"

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kim Suhwan] Virgin Orbit, a subsidiary of British billionaire Richard Branson's Virgin Group, plans to go public on the Nasdaq by merging with a Special Purpose Acquisition Company (SPAC).

On the 23rd (local time), The Wall Street Journal (WSJ) and Bloomberg reported that Virgin Orbit aims to complete the merger with the SPAC by the end of this year.

Virgin Orbit, founded by Chairman Branson, is a company spun off from the space tourism company Virgin Galactic and specializes in satellite launch services.

The company has successfully conducted two airborne satellite launches this year, using a modified Boeing 747 aircraft to launch rockets for satellite deployment from an altitude of 45,000 feet (approximately 13.7 km).

Regarding Virgin Orbit's listing plan, Chairman Branson described it as "another milestone that supports all efforts to create space technology that positively changes the world."

According to CNBC and WSJ, the SPAC merging with Virgin Orbit is NextGen Acquisition, led by George Mattson, a former Goldman Sachs executive, and Gregory Some, a former executive of the Carlyle Group.

Virgin Orbit's corporate value was estimated at $3.2 billion (approximately 3.8 trillion KRW). Through the Nasdaq listing, it is expected to raise a total capital of $483 million (approximately 566.1 billion KRW), including a $100 million Private Investment in Public Equity (PIPE).

The company stated that Boeing and private equity firm AE Industrial Partners will participate in the PIPE. Specific investment amounts by each company were not disclosed.

In 2019, Chairman Branson also took his space development company Virgin Galactic public through a SPAC merger. At that time, he said the merger allowed for "a more efficient way to raise capital."

Bloomberg reported, "It appears that Chairman Branson is pursuing the same SPAC merger approach for Virgin Orbit based on the successful listing of Virgin Galactic."

Bloomberg also noted that as private sector space development competition intensifies, with SpaceX led by Elon Musk successfully launching the first private manned spacecraft, business opportunities in the private satellite launch industry are expanding.

There is analysis that Boeing invested in Virgin Orbit seeing the potential of the satellite launch industry. A Boeing spokesperson stated, "We trust the importance of the satellite launch industry and the capabilities Virgin Orbit possesses."

Virgin Orbit announced on June 30 that it had signed satellite sales contracts worth $300 million for both commercial and military satellites.

WSJ reported that Boeing's investment in Virgin Orbit came at a time when its own space program was facing setbacks. Boeing recently postponed a test flight of its manned capsule Starliner, which is intended to travel to the International Space Station (ISS), due to a valve failure issue.

In the statement announcing the Nasdaq listing, Virgin Orbit set a goal to achieve positive EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) by 2024.