Branson brings in Boeing for $3.2 billion Virgin Orbit SPAC deal

Richard Branson’s Virgin Orbit will get an investment from Boeing Co. as the satellite-launch provider goes public through a reverse merger with NextGen Acquisition Corp. II that values the new company at $3.2 billion.

Investors including Boeing and AE Industrial Partners committed to provide $100 million to Virgin Orbit through a private investment in public equity, according to a statement Monday. 

The agreement with NextGen is part of a wave of mergers with special-purpose acquisition companies. So-called blank-check companies like NextGen have raised $129 billion globally this year, more than last year’s record $84 billion haul, though the pace of listings has slowed in recent months.

The Virgin Orbit merger is expected to close around year-end. The company will trade on the Nasdaq Stock Market under the ticker symbol VORB and keep the Virgin Orbit name. The deal is expected to provide the new company with $483 million in cash proceeds.

Boeing rose 2.4% to $217.71 at 9:35 a.m. in New York. The stock was little changed this year through Aug. 20, while the Dow Jones Industrial Average advanced 15%. NextGen climbed 2.2% to $9.89.

Companies like Virgin Orbit and Elon Musk’s Space Exploration Technologies Corp. have brought attention to the satellite-launch sector by making missions less costly, in part by reusing rockets, creating opportunities for new businesses in space. A SPAC involving another launch company, Rocket Lab USA, is set to close this week. 

Founded in 2017, Virgin Orbit uses a customized Boeing 747 jumbo jet to launch its reusable rockets at about 35,000 feet above sea level. On June 30, the company delivered satellites for commercial and national-security customers.

The company is able to share expertise with Branson’s Virgin Galactic Holdings Inc., which looks to offer trips to space to the general—if well-heeled—public at $450,000 a pop. Branson and five Virgin Galactic employees made roughly a one-hour suborbital trip in July. The company went public through a SPAC deal in late 2019.

SPAC transactions have become increasingly difficult to complete as investors have grown more selective about the private investments in public equity that are typically part of the deals. Lackluster performance by companies that have gone public through SPACs as well as scrutiny from short sellers, activists and regulators also have created hurdles to getting deals done.