Rocket Lab to Go Public: $4.1 Billion SPAC Deal

Rocket Lab to Go Public via SPAC Merger

A surge in activity is underway for space-focused startups, as the pace of exits has been comparatively measured until the recent wave of special purpose acquisition company (SPAC) mergers. Rocket Lab is the newest entrant into this trend, and arguably the most prominent, announcing an agreement to merge with Vector, a SPAC.

Following the completion of this transaction, anticipated in the second quarter of the current year, Rocket Lab will be listed on the Nasdaq exchange under the ticker symbol RKLB.

Company Valuation and Financials

Through this merger, Rocket Lab will achieve a pro forma enterprise value of $4.1 billion. The combined entity is projected to have a total cash balance of $750 million following the deal's closure.

This financial position is bolstered by a $470 million private investment in public equity (PIPE) round, with contributions from Vector, BlackRock, and other investors. Existing Rocket Lab shareholders will maintain an 82% ownership stake in the newly formed company.

Rocket Lab's History and Capabilities

Founded in 2006, Rocket Lab initially established operations in New Zealand, where it continues to conduct launches. The company’s headquarters have since been relocated to Los Angeles.

In 2013, Rocket Lab inaugurated its California headquarters and has since completed its first U.S. launch facility located at Wallops Island, Virginia.

The company’s Electron launch vehicle is specifically designed to deliver small payloads into orbit. It caters to the expanding small satellite market by providing responsive and adaptable launch solutions.

Government Contracts and Future Projections

Rocket Lab has successfully executed launches for the U.S. government, including missions involving national security payloads. This represents a significant and ongoing revenue stream for the company.

Currently, Rocket Lab reports a substantial customer backlog. The company anticipates achieving “EBITDA positive” status in 2023, with adjustments, and full cash-flow positivity by 2024.

Projections indicate a revenue run rate exceeding $1 billion by 2026.

Expanding Launch Capabilities

Rocket Lab is actively working to increase its launch frequency through several key initiatives. These include continuous improvements to its production capacity, particularly its advanced automated carbon-fiber manufacturing processes.

The establishment of its U.S. launch site, coupled with the upcoming opening of a second launch pad at its privately-owned New Zealand facility, further enhances its operational capabilities.

Furthermore, the company is developing partial reusability for its Electron vehicle, a move intended to accelerate launch turnaround times, as stated by founder Peter Beck.

Introducing Neutron: A Heavier-Lift Vehicle

Rocket Lab recently unveiled plans for a new, heavier-lift launch vehicle named Neutron. This vehicle will boast a payload capacity of eight tons, equivalent to approximately 16,000 pounds.