Rocket Lab, to Become Publicly Traded Through Merger with Vector Acquisition Corporation
Long Beach, Calif., March 1, 2021--Rocket Lab USA, Inc. a provider of launch and space systems, and Vector Acquisition Corporation (Nasdaq: VACQ) a special purpose acquisition company backed by technology investor Vector Capital, announced today that they have entered into a definitive merger agreement that will result in Rocket Lab becoming a publicly traded company. The transaction is estimated to be completed in Q2 2021 and, at that time, Vector will change its name to Rocket Lab USA, Inc. and the combined company will trade under the Nasdaq ticker symbol RKLB.
Advanced, Next Generation Neutron Rocket
Rocket Lab also unveiled today its medium-lift Neutron rocket—an advanced new generation reusable launch vehicle with an 8-ton payload lift capacity tailored for mega constellations, deep space missions and human spaceflight. Neutron will be able to lift more than 90% of all satellites forecast to launch through 2029 and introduce highly disruptive lower costs to the high-growth constellation market by leveraging Electron’s heritage, launch sites and architecture.
Proposed Transaction is the Next Logical Step in Rocket Lab’s Development
Rocket Lab’s in-house launch and space systems capabilities provide significant competitive advantages in entering the high-growth space applications market that comprises approximately US$ 320 billion of the current US$ 350+ billion space industry TAM.
Having reached these milestones—and considering the unprecedented commercial investment and government expenditures driving rapid growth in the space economy—Rocket Lab and its Board of Directors believe that this proposed transaction is the appropriate next step to position the Company for continued success. A strong and building backlog and opportunity pipeline support Rocket Lab’s forecast that the Company will be adjusted EBITDA positive in 2023, cash flow positive in 2024 and cross US$ 1 billion in revenue in 2026.
Key Transaction Terms
On March 1, 2021, Rocket Lab entered into a definitive merger agreement with Vector. The transaction reflects an implied pro forma enterprise value of US$ 4.1 billion for Rocket Lab, representing 5.4x 2025 projected revenue of approximately US$ 750 million.
The transaction is expected to result in pro forma cash on the balance sheet of approximately $750 million through the contribution of existing cash estimated to be on Rocket Lab’s balance sheet prior to close, up to $320 million of cash held in Vector Acquisition Corporation’s trust account (assuming no redemptions by Vector’s public shareholders), and a concurrent approximately $470 million PIPE of common stock, priced at $10.00 per share and led by Vector Capital, BlackRock and Neuberger Berman, among other top-tier institutional investors.
The transaction, which has been unanimously approved by the Boards of Directors of Rocket Lab and Vector, is subject to approval by Vector’s shareholders and other customary closing conditions.
Following the closing of the transaction, the company will continue to be led by Founder and CEO Peter Beck. Alex Slusky, CEO of Vector and CIO and Founder of Vector Capital, will join Rocket Lab’s Board of Directors alongside Sven Strohband of Khosla Ventures, David Cowan of Bessemer Venture Partners, Matt Ocko of DCVC and Mike Griffin, independent director.
Additional information about the proposed transaction, including a copy of the merger agreement and investor presentation, will be available in a Current Report on Form 8-K to be filed by Vector with the Securities and Exchange Commission and at www.sec.gov. The investor presentation can also be found on Rocket Lab’s investor website at www.rocketlabusa.com/investors.
Advisors
Morgan Stanley & Co. LLC is serving as sole financial advisor to Rocket Lab, with Goodwin Procter LLP serving as legal counsel to the Company. Morgan Stanley & Co. LLC is also acting as the lead placement agent for Vector on the PIPE and capital markets advisor. Deutsche Bank Securities is serving as sole financial advisor and capital markets advisor to Vector as well as placement agent on the PIPE, with Kirkland & Ellis LLP serving as legal advisor.
