LONDON – Richard Branson’s Virgin Orbit has hired bankers to help publish it this year through a special procurement company, aiming to make a valuation for the $ 3 billion satellite launch, according to people familiar with the matter .
The move is the latest attempt by Mr. Branson to take advantage of a recent surge in similar, blank-check listings. His Virgin group has played on both sides of the SPAC craze: In 2019, he listed his space tourism company, Virgin Galactic Holdings. Inc.,
SPCE 2.89%
by merging it with a SPAC, essentially a pool of money with a stock market listing.
In February, an empty check company supported by Virgin said it was working with 23andMe Inc. will merge into a deal valued at $ 3.5 billion by the genetic testing company, including debt.
Branson’s two US space companies – Virgin Orbit and Virgin Galactic – were bright spots in an empire otherwise hampered by the pandemic. The spread of the new coronavirus and consequent closures around the world have hit the airline, tourism and gym businesses that are the core of Virgin Group.
Virgin Orbit has hired Credit Suisse Group AG and LionTree LLC and is looking for a SPAC merger partner that could make it worth $ 2.5 billion to more than $ 3 billion, according to people familiar with the case.
The company of mr. Branson owns 80% of Virgin Orbit, and Mubadala Investment Co., the United Arab Emirates’ fund for sovereign wealth, owns the rest.
Private companies are flocking to specialty procurement firms, or SPACs, to bypass the traditional IPO process and get a public listing. WSJ explains why some critics say it is not worth investing in these so-called blank-check businesses. Illustration: Zoë Soriano / WSJ
The targeted valuation will be a significant jump from the $ 1 billion that the missile preparation targeted last year, due to a previously planned private fundraiser. The people still have not ruled out a private fundraiser, but are now focused on a SPAC.
Achieving the target valuation is far from guaranteed. Virgin Orbit still needs to reach an agreement with a specific SPAC to make a deal and then secure the extra investment from outside that usually comes with a SPAC merger.
Virgin Orbit is seeking a higher valuation following a successful launch of one of its satellite missiles in January. That flight included the company in a small group of small satellite providers that could offer flight-proof hardware.
The company in Southern California uses a launch method that is unique to its competitors. A converted jumbo jet unleashes a rocket, which then shoots up and carries its payload of small satellites in orbit.
Virgin Orbit’s focus on a merger with a SPAC comes as investors increasingly bet on the declining costs of gaining access to space for business, tourism and scientific research to spur the growth of the industry.
SPACs are 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 to list on the Nasdaq stock market. The adjustment values the private rocket launch at $ 2.1 billion, including debt.
Momentus Inc., a developer of technology to propel small satellites into orbit, agreed in October to merge with Stable Road Acquisition Corp.
, a SPAC, to publish on Nasdaq, valued 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 spatial cellular broadband network at $ 1.4 billion, including debt.
Write to Alistair MacDonald at [email protected] and Ben Dummett at [email protected]
Corrections and reinforcements
Virgin Orbit is based in Southern California. In an earlier version of this article, it was incorrectly named a company in South Carolina. (Corrected on March 12)
Copyright © 2020 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8
The print edition appeared on March 13, 2021 as ‘Branson Explores a SPAC Listing for His Satellite-Launching Startup.’