Space stocks have been hot as investors look for ways to capitalize on the growing industry. Several space-related companies have taken the SPAC path to the public markets, and on Tuesday another private space company chose this route.
The SPAC Deal: Astra announced it is going public in a SPAC merger with Holicity Inc HOL in a deal that values the company at $2.1 billion.
The deal includes a $200-million PIPE and will see Astra receive $500 million in cash proceeds after the merger closes.
The company will trade as "AST"R on the NASDAQ when the deal is completed. Current Holicity shareholders will own 12% of Astra if the merger is approved and completed.
About Astra: The SPAC deal gets Astra one step closer to its mission of improving life on Earth from space. The company was founded by Chris Kemp, who was the first chief technology officer for NASA.
Astra is a member of an elite group of companies that have successfully made it to space.
Among the segments for Astra are global broadband connectivity, internet of things, Earth observation, national security and next generation weather and GPS services.
Growth Ahead: Astra said it will begin delivering customer payloads this summer and begin monthly launches by the end of the year.
The Astra presentation says the “new space age is at an inflection point.” Over 38,000 satellites are to be built from 2020 to 2029, a 14x increase from the total built in 2010 to 2019. The launch market represents $100 billion in revenue over the next decade.
Astra has over 10 launch sites identified and says commercial FAA spaceports only require a concrete pad. The company can mass produce a portable launch system to launch from anywhere in the world within 24 hours.
The company said it has the most affordable path to space for government and commercial customers. Astra has been awarded a venture class launch services award from NASA and has deals from over five government customers.
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Competition: Astra is one of several companies competing in the satellite and space launch industries. With its SPAC deal it will be the first pure play space launch company, competing with privately held SpaceX, which was founded by Tesla Inc TSLA CEO Elon Musk, and others.
Astra successfully made it to space in December in a time frame of four years. This was faster than competitors SpaceX, Rocket Labs and Virgin Orbit, which took seven years, 12 years and 13 years, respectively, to have a successful commercial space launch.
Financials: Astra has more than 10 customers and over 50 launches in its backlog.
The backlog also has over 50 launches in the backlog. The company’s pipeline is over $1.2 billion.
Astra’s presentation lays out the launch goals for each year through 2025. Rocket launches are expected to total 15, 55, 165 and 300 from 2022 through 2025. Satellite launches are expected to total 10, 60, 250 and 660 for fiscal 2022 to fiscal 2025, respectively.
Company revenue estimates call for $67 million in fiscal 2022, $256 million in fiscal 2023, $780 million in fiscal 2024 and $1.5 billion in fiscal 2025. Revenue growth of over 100% is expected for each of the next three fiscal years.
The SPAC deal being done values Astra at 3.1x 2025 estimated EBITDA.
Price Action: Shares of Holicity are up 43.2% to $14.85 on Tuesday.
Photo courtesy of Astra.
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