Another Virgin Space Property Finds Liquidity Dreams via SPAC
Posted on 08/24/2021
NextGen Acquisition Corp. II (NASDAQ: NGCA) is a special purpose acquisition company (SPAC). NextGen Acquisition Corp. II entered into a definitive merger agreement under which Virgin Orbit Holdings, Inc. will become a publicly-traded company. Vieco USA, Inc. is the parent company of Virgin Orbit. Virgin Orbit has developed a proprietary air-launch technology. Since its founding in 2017, Virgin Orbit has developed the world’s first air-launched, liquid-fueled launch system. In January 2021, Virgin Orbit launched satellites for NASA.
Upon closing, the transaction is expected to provide the combined company up to US$ 483 million in cash proceeds, including up to US$ 383 million of cash held in the trust account of NextGen (assuming no redemptions) and a US$ 100 million fully committed PIPE; the combined company will retain the Virgin Orbit name and is expected to be listed on Nasdaq under the ticker symbol “VORB.” The transaction values Virgin Orbit at an implied pro forma enterprise value of approximately US$ 3.2 billion and is expected to close in Q4 2021, subject to, among other things, approval by NextGen’s shareholders and the satisfaction or waiver of other customary closing conditions.
Virgin Orbit’s existing shareholder base is comprised of Virgin Group, Mubadala Investment Company, and management and employees. Existing Virgin Orbit shareholders will roll 100% of their equity into the combined company. Assuming no redemptions by NextGen’s shareholders, existing Virgin Orbit shareholders are expected to retain ownership of approximately 85% of the combined company, NextGen’s public shareholders are expected to own approximately 10% of the combined company, with PIPE investors and the SPAC sponsor expected to own approximately 3% and 2%, respectively, in each case, immediately following closing.
Abdulla Shadid, Executive Director, Growth & M&A at Mubadala, said in a press release, “Virgin Orbit is a game changer for the small satellite launch and space solutions industry and its listing is expected to be yet another milestone in its continuing success story. Our investment in Virgin Orbit since its inception is a reflection of our confidence in the company’s ability to carve out a leading role in this sector. It also complements the broad objectives of the UAE’s national space strategy, as reflected in the recent successful “Hope” satellite mission to Mars.”
Credit Suisse Securities (USA) LLC is serving as lead financial advisor and lead capital markets advisor to Virgin Orbit and co-lead placement agent for the PIPE transaction. Perella Weinberg Partners L.P. and LionTree LLC are also serving as additional financial advisors to Virgin Orbit.
Latham & Watkins LLP is serving as legal advisor to Virgin Orbit.
Goldman Sachs & Co. LLC is serving as exclusive financial advisor to NextGen and as co-lead placement agent for the PIPE transaction. Rothschild & Co is acting as an additional financial advisor to NextGen. Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal advisor to NextGen.
Sullivan & Cromwell LLP is serving as legal advisor to the placement agents.