Virgin Orbit is in talks to go public through a reverse merger deal with the NextGen Acquisition II (NGCA) SPAC. The deal could be announced soon. Is NGCA stock a good buy amid the Virgin Orbit merger news?
Virgin Orbit is a satellite-launching spinoff of billionaire Sir Richard Branson’s space tourism company Virgin Galactic. On July 11, Branson successfully flew to space and back aboard the VSS Unity spacecraft.
Who's the sponsor of NGCA SPAC?
In its March 2021 IPO, NGCA raised $350 million by offering 35 million shares for $10 each. It's looking for a merger target in the industrial, technology, and healthcare-related space. NGCA is co-led by George Mattson and Gregory Summe. Summe is a former chairman of the Carlyle Group, while Mattson is a former Goldman Sachs banker. The team’s previous SPAC, NextGen Acquisition (NGAC), plans to take commercial EV developer Xos Trucks public.
Is NGCA merging with Virgin Orbit?
In June, Sky News reported that NGCA is in discussions to bring Virgin Orbit public. The deal might value the company at approximately $3 billion, according to the people familiar with the matter. A deal could be announced over the next several weeks.
Virgin Orbit uses a rocket known as LauncherOne, which can carry small satellites that weigh up to 500 kilograms into space. On June 30, the company successfully reached orbit during its second test flight. Virgin Orbit is planning for the third launch in 2021 with an even busier 2022.
NGCA’s stock forecast
We can’t provide a forecast for NGCA stock since the SPAC hasn’t decided on a merger target and we don’t have a specific valuation.
Will NGCA stock rise or fall?
It’s difficult to predict whether NGCA stock will rise or fall since a merger deal hasn't been reached. The stock can climb after the merger deal is announced—unless the sponsors mess up with the merger target or the valuation.
Should you buy NGCA stock on the Virgin Orbit merger news?
NGCA stock is a speculative play until the company announces the merger target. Investors should wait to buy the stock until more details emerge. NGCA's management team appears to be strong with a good track record of identifying and investing in private firms.
Virgin Orbit versus Rocket Lab
Virgin Orbit faces major competition from Rocket Lab. While Virgin Orbit launches rockets from the sky, Rocket Lab or Astra launch their rockets from the ground. NGCA is expected to value Virgin Orbit at a valuation of $3 billion.
Rocket Lab is in talks to go public through a reverse merger deal with Vector Acquisition (VACQ) SPAC at a pro forma equity valuation of $4.8 billion. In its investor presentation announcing the merger deal, Rocket Lab said that it had delivered 97 satellites to Orbit compared to Virgin Orbit’s nine satellite launches. Rocket Lab expects to report total revenue of $69 million in 2021, $176 million in 2022, and $267 million in 2023.