Small-launch leader Rocket Lab going public via a SPAC, with plans for bigger Neutron rocket

Rocket Lab, the leader among companies building small rockets to launch satellites, is going public through a SPAC merger that values the company at more than $4 billion when the deal closes.

The company is combining with Vector Acquisition, a special purpose acquisition company. Rocket Lab will list on the Nasdaq under the ticker RKLB when the deal closes, which is expected in the second quarter.

“This milestone accelerates Rocket Lab’s ability to unlock the full potential of space through our launch and spacecraft platforms and catalyzes our ambition to create a new multi-billion-dollar business vertical in space applications,” Rocket Lab CEO Peter Beck said in a news release.

Vector’s SPAC currently trades under the ticker VACQ. Shares of the SPAC climbed more than 20% in premarket trading from its previous close of $10.25 a share.

The SPAC deal values Rocket Lab at an enterprise valuation of $4.1 billion, with the company expecting to have about $750 million in cash after the merger is complete. That cash includes up to $320 million from Vector Acquisition, as well as a $470 million PIPE round led by Vector Capital, BlackRock and Neuberger Berman, among other investors.

PIPE, or private investment in public equity, funding allows private investors to buy public shares at below-market prices. A SPAC is a special purpose acquisition company in which investors give essentially a blank check to a company for the purpose of unspecified acquisitions of other firms.

Beck will continue to lead Rocket Lab as CEO, with Vector Capital’s chief investment officer Alex Slusky set to join the company’s board of directors – alongside Khosla Ventures’ Sven Strohband, Bessemer Venture Partner’s David Cowan, DCVC’s Matt Ocko, and independent director Mike Griffin.

Rocket Lab also unveiled plans for a second, larger rocket called Neutron to lift even more payloads than its current Electron rocket. The company has launched 97 satellites on 18 Electron missions to date.

Its Electron rockets are priced at about $7 million per launch, standing at about 60 feet tall and capable of lifting as much as 300 kilograms to low Earth Orbit.

Neutron, which is expected to launch in 2024 for the first time, will stand at 131 feet tall and will be capable of carrying as much as 8,000 kilograms to low Earth orbit, the company said. Rocket Lab did not disclose how much Neutron is expected to cost per launch, noting that its first launch will require the company to build a new launchpad at NASA’s Wallops flight facility in Virginia.

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