Virgin Orbit to go public via merger with SPAC NextGen

Virgin Orbit, a launch and space solutions company, has agreed to go public via a merger with NextGen Acquisition Corp II, a blank check company.

Virgin Orbit, a launch and space solutions company, has agreed to go public via a merger with NextGen Acquisition Corp II, a blank check company. When the deal closes, the newly combined company will net up to $483 million in cash proceeds. The newly combined company will retain the Virgin Orbit name and list on the NASDAQ under the ticker symbol “VORB.” NextGen is led by George Mattson, a former partner at Goldman Sachs and Gregory Summe, a vice chairman of the Carlyle Group.

PRESS RELEASE

LONG BEACH, Calif.–(BUSINESS WIRE)–Virgin Orbit, the responsive launch and space solutions company, through its parent company Vieco USA, Inc. (“Virgin Orbit” or the “Company”) and NextGen Acquisition Corp. II (“NextGen”) (NASDAQ: NGCA), a special purpose acquisition company, announced today that they have entered into a definitive merger agreement (the “Merger Agreement”) under which Virgin Orbit will become a publicly-traded company.

Upon closing, the transaction is expected to provide the combined company up to $483 million in cash proceeds, including up to $383 million of cash held in the trust account of NextGen (assuming no redemptions) and a $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 around the end of the year, 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, (“Virgin”), Mubadala Investment Company (“Mubadala”), 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.

OVERVIEW OF VIRGIN ORBIT

LAUNCH
Virgin Orbit has developed a proprietary air-launch technology, coupled with world-class manufacturing infrastructure and a proven team to transform space access for a diverse and global customer base. Since its founding in 2017, Virgin Orbit has developed the world’s first air-launched, liquid-fueled launch system.

The Company’s most recent successful launch – conducted on June 30, 2021 – precisely delivered satellites for commercial and national security customers from the US and abroad directly into their target orbits. In January 2021, the Company successfully launched satellites for NASA.

Virgin Orbit uses a customized 747 aircraft as a mobile launch site, a flying mission control, and a fully-reusable first stage vehicle. By beginning each mission at approximately 35,000 feet above sea level and already travelling at a high speed, the simple and reliable LauncherOne rocket achieves a significant performance advantage over grounded launch sites while reducing local carbon emissions and acoustic impacts at the launch site when compared to a traditional ground launch.

The mobility of the system also allows Virgin Orbit to bring launch capabilities to dozens of nations that currently have space agencies and satellite industries but no domestic launch capability. The Company has been selected by the United Kingdom and Brazil to bring launch to those nations’ shores, in addition to Virgin Orbit’s announced launch site in Japan and multiple locations in the United States.

Having already successfully delivered satellites into precisely targeted orbit for the US Department of Defense and other national security customers, Virgin Orbit’s proven technology can also be leveraged to serve a diverse portfolio of defense and national security applications. Virgin Orbit’s ability to launch responsively from any location around the world delivers a valuable deterrent in ensuring the resiliency and replaceability of critical satellite infrastructure assets.

SPACE-ENABLED DATA AND ANALYTICS SERVICES
Virgin Orbit is selectively investing with constellation partners to provide end-to-end, value-added services for Earth Observation and the Internet of Things (IoT) applications, using the “Satellites as a Service” model. Virgin Orbit’s IoT offering will focus on connectivity applications for ship management, aircraft, pipeline monitoring, and intelligent agriculture, which has the potential to help improve efficiency across some of the world’s biggest industries.

Virgin Orbit is well positioned to expand through its combination of global reach; collaborative partnerships with customers and unique ability to provide end-to-end secure services through in-country launch with its transportable and mobile launch system. Virgin Orbit will seek to expand its Satellite as a Service activities beyond the previously announced investments in innovative satellite companies such as ArQit, HyperSat, and others. Virgin Orbit is entering into commercial partnerships with BigBear.ai and Redwire to develop and enhance next generation space solutions offerings.

MANAGEMENT COMMENTS
Sir Richard Branson, the Founder of Virgin Orbit, said “The Virgin Orbit team has proven its ability to create new ideas, new approaches, and new capabilities. They are building on the incredible foundation of their rapid transition into successful commercial launch operations to find new ways to solve big problems that uplift our customers’ amazing ideas, again and again. I’m very excited we are taking Virgin Orbit public, with the support of our partners at NextGen and our other wonderful investors. It’s another milestone for empowering all of those working today to build space technology that will positively change the world.”

Dan Hart, the CEO of Virgin Orbit, said “We’ve built Virgin Orbit in order to change the business of satellite launch and to open space for everyone, globally. Whether it’s engaging with world leaders at the G7 Summit or seeing the smiles on the faces of our international community of customers after our most recent launch, our mission gets more exciting with every step we take. Our success in launch has driven the business forward, and now we expect this investment will enable us to build on our R&D efforts and our incredible team. We are driving innovation with world-class design and advanced manufacturing capabilities, our unrivaled mobility of launch, and our exciting space solutions services.”

George Mattson and Greg Summe, the Co-Founders of NextGen, said “We are delighted that our search for a great company, with strong organic growth in a large and growing market, disruptive technology and a world class management team has led to our partnership with Virgin Orbit. The space economy is developing rapidly and Virgin Orbit is well positioned to benefit through its ability to competitively launch at any time, from any place on Earth, to any orbit and inclination. This is a truly unique and differentiating capability. We have worked with Sir Richard and the Virgin Group on various projects, including Virgin Galactic, over the last few years and admire their vision and commitment as they have built Virgin Orbit from an idea to a commercial reality. We look forward to leveraging our industry and financial experience, along with our public company leadership and governance experience to help Virgin Orbit deliver the next chapter of its exciting journey as a public company.”

Abdulla Shadid, Executive Director, Growth & M&A at Mubadala, said “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.”

TRANSACTION SUMMARY
On August 22, 2021, Virgin Orbit has entered into the Merger Agreement to become publicly traded on Nasdaq through a business combination with NextGen. The transaction values Virgin Orbit at an implied pro forma enterprise value of approximately $3.2 billion. The combined company is expected to receive approximately $483 million of gross proceeds from the combination of approximately $383 million of cash held in NGCA’s trust account (assuming no redemptions) and a fully committed common stock PIPE offering of $100 million at $10.00 per share.

Proceeds from the business combination and PIPE transaction are expected to provide growth capital to further scale rocket manufacturing to meet customer demand and to fund growth in its space solutions business and Virgin Orbit’s ongoing product development initiatives.

The boards of directors of both Virgin Orbit and NextGen have unanimously approved the proposed business combination, which is expected to be around the end of the year subject to, among other things, the approval by NextGen’s shareholders and the satisfaction or waiver of other customary closing conditions.

Additional information about the proposed transaction, including a copy of the merger agreement and investor presentation, will be provided in a Current Report on Form 8-K to be filed by NextGen today with the Securities and Exchange Commission (“SEC”) and available at www.sec.gov.

ADVISORS
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.

ABOUT VIRGIN ORBIT
Virgin Orbit builds and operates one of the most flexible and responsive satellite launchers ever invented: LauncherOne, a dedicated launch service for commercial and government-built small satellites. LauncherOne rockets are designed and manufactured in Long Beach, California, and are air-launched from a modified 747-400 carrier aircraft, Cosmic Girl, which allows Virgin Orbit to operate from locations all over the world in order to best serve each customer’s needs.

In just a span of four years since its creation in 2017, Virgin Orbit has developed a proprietary air-launch technology, coupled with world-class manufacturing infrastructure and a proven team to transform space access for a diverse and global customer base.

ABOUT NEXTGEN
NextGen Acquisition Corp. II is a blank check company whose business purpose is to effect a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. NextGen is led by George Mattson, a former Partner at Goldman, Sachs & Co., and Gregory Summe, former Chairman and CEO of Perkin Elmer and Vice Chairman of the Carlyle Group. NextGen is listed on Nasdaq under the ticker symbol “NGCA.” For more information, please visit www.nextgenacq.com.