Rocket Lab Buys Virgin Orbit Facility In $16M Deal, Plans Engine Development

Rocket Lab USA, Inc RKLB showcased its new engine development center within Virgin Orbit's former facility, making it a cost-effective decision.

The company acquired the 144,000-square-foot complex for $16.1 million during Virgin Orbit's bankruptcy auction in May, significantly below its actual worth, providing a crucial boost to their expansion.

Rocket Lab recently inaugurated its engine development center within Virgin Orbit's former facility, signaling a cost-efficient strategy to scale up its operations, TechCrunch reports.

The 144,000+ square-foot complex will house the production of the Rutherford engine, a key component of Rocket Lab's rockets, and serve as the development and production hub for the new Archimedes engine, which will power their Neutron launch vehicle. This move comes after Rocket Lab successfully bid $16.1 million for the facility during Virgin Orbit's bankruptcy auction in May.

According to Rocket Lab CEO Peter Beck, the acquisition — which included all machinery and equipment — is valued at around $100 million, a fraction of the cost of building a new facility.

The former Virgin Orbit complex, less than a mile from Rocket Lab's headquarters in Long Beach, California, provides operational convenience. This development aligns with Rocket Lab's ongoing efforts to expand its launch capabilities. While the company is renowned for its small rocket, Electron, the new Neutron launch vehicle currently in development, aims to carry up to 13 tons to orbit. Neutrons can serve mega-constellation projects and potentially even human spaceflight missions, marking a significant step forward in Rocket Lab's endeavors.

Rocket Lab's Neutron vehicle will be powered by the Archimedes engine, with the first stage featuring nine of these engines. The second stage will incorporate a single vacuum Archimedes engine. This engine development center complements Rocket Lab's existing suite of Neutron development sites across the U.S. The company is also constructing a 250,000-square-foot Neutron Production complex and launch pad at NASA's Wallops Flight Facility to support rapid production of the launch vehicle.

Price Action: RKLB shares traded higher by 3.49% at $5.49 premarket on the last check Wednesday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.