Rocket Lab will acquire satellite communications company Iridium in a deal valued at about US$8 billion (NZ$14.2b), with the aim of transforming the company, while taking on SpaceX and its Starlink service.<\/p>\n
Under the agreement announced on Monday, Rocket Lab would pay US$54 a share for Iridium through a mix of cash and Rocket Lab shares, valuing Iridium at an enterprise value of about US$8 billion.<\/p>\n
The transaction is expected to close in mid-2027, subject to shareholder and regulatory approvals.<\/p>\n
The acquisition would give Rocket Lab ownership of Iridium’s global low-Earth-orbit satellite communications network, its global L-band spectrum rights and more than 2.5 million subscribers worldwide.<\/p>\n
Iridium was founded by Motorola in the early 1990s, and provided voice, data, positioning and navigation services to customers in defence, aviation, maritime and commercial markets.<\/p>\n
Rocket Lab founder and chief executive Sir Peter Beck described the takeover as one of the most transformative deals undertaken in the space industry.<\/p>\n
“This is a defining moment for the space industry and the start of a new era of strategic, accelerated growth for Rocket Lab and Iridium,” Sir Peter said.<\/p>\n
“Iridium has built the gold standard in secure, safety-critical global satellite connectivity.”<\/p>\n
The deal marked a significant shift in Rocket Lab’s business model.<\/p>\n
The transaction moved Rocket Lab beyond its traditional role as a launch provider and manufacturer towards becoming a satellite communications and services company.<\/p>\n
From its origins as a launch company, Rocket Lab has spent the past decade expanding into satellite manufacturing and space systems.<\/p>\n
Acquiring Iridium would provide it with a large recurring revenue stream from satellite communication services rather than relying primarily on launch and hardware contracts.<\/p>\n
Rocket Lab told investors the acquisition would accelerate its move into higher-value space applications markets, including direct-to-device communications, internet-of-things services, positioning and navigation systems, and defence applications.<\/p>\n
The acquisition would make Rocket Lab one of the few companies able to design satellites, manufacture spacecraft, launch them into orbit and operate a communications network from space.<\/p>\n
Rocket Lab has secured commitments for a US$3.6b (NZ$6.4b) bridge financing facility from Deutsche Bank and Wells Fargo and said it intended to fund the cash component of the transaction through a combination of existing cash, debt and equity financing.<\/p>\n
Investors welcomed the deal, with Rocket Lab’s Nasdaq-listed shares climbing by nearly 16% to close at US$97.95 (NZ$173).<\/p>\n