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

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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. (NASDAQ: 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. (NASDAQ: 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. (NYSE: 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. (NYSE: 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.

 

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