Rocket Lab took a big step Monday to better compete with rivals SpaceX and Amazon, announcing an $8-billion acquisition of satellite communications company Iridium.<\/p>\n
The Long Beach rocket-and-satellite maker is buying a company that provides critical communications services to pilots, mariners and others, while giving Rocket Lab a foothold in the emerging satellite-based mobile phone market.<\/p>\n
\u201cWe are going to absorb it, optimize it and scale it into something that is really truly fantastic,\u201d said Rocket Lab Chief Executive Peter Beck in a YouTube presentation<\/a> of the deal.<\/p>\n Rocket Lab is paying $54 a share for McLean, Va.-based Iridium<\/a> \u2014 $27 in cash and the rest in shares. Deutsche Bank and Wells Fargo are providing $3.6 billion in financing in the deal, which is expected to close next year.<\/p>\n Iridium\u2019s 66 low-Earth-orbit satellites<\/a> provide voice, data, navigation and other services to remote regions and across the globe to 2.55 million government, defense, aviation, maritime and commercial subscribers.<\/p>\n Iridium reported net income of $114 million in 2025, up 2% from the previous year. Revenue climbed 5% to $872 million.<\/p>\n The market for mobile cellular and other satellite-based communications is growing rapidly.<\/p>\n Elon Musk\u2019s SpaceX spent $17 billion last year<\/a> to acquire spectrum from EchoStar and then followed it up with a $2.6-billion purchase. The spectrum will allow its Starlink broadband satellite network to provide mobile phone service worldwide.<\/p>\n In April, Amazon agreed to acquire satellite operator Globalstar<\/a> in a roughly $11.6-billion deal that would expand the services of its satellite system and the so-called direct-to-device smartphone market.<\/p>\n The competition has raised concerns about Iridium\u2019s ability to compete.<\/p>\n SpaceX went public this month in the largest initial public offering ever<\/a>, raising $86 billion, with the company now valued at more than $2 trillion.<\/p>\n In February, Iridium Chief Executive Matthew Desch said the company has shown it\u2019s not \u201cin decline,\u201d dismissing concerns that it couldn\u2019t compete with Starlink, according to Morningstar<\/a>.<\/p>\n Founded in 2006 in New Zealand, Rocket Lab moved to the U.S. a decade ago and opened its Long Beach headquarters<\/a> in 2020. It has manufacturing and mission operations in Virginia, New Mexico, Colorado, Maryland, Toronto and New Zealand.<\/p>\n The company manufactures a small rocket called Electron that has launched 262 satellites into space, making it the second-busiest U.S. launch provider behind SpaceX. Rocket Lab is developing a larger rocket called Neutron, and it also makes satellites, subsystems and space components.<\/p>\n Beck said the acquisition of Iridium will propel Rocket Lab into the satellite communications business. That would otherwise be a slow process, requiring the acquisition of spectrum, satellite development and establishment of a customer base.<\/p>\n \u201cWe think we\u2019ve found a little bit of a shortcut here,\u201d Beck said, noting the combined company will be vertically integrated, able to design, build, launch and operate its own satellites.<\/p>\n The deal is \u201cvery strategic\u201d for Rocket Lab, William Blair analyst Louie DiPalma said in a note to clients, according to Morningstar.<\/p>\n Rocket Lab has announced multiple contracts this year. <\/p>\n Last week, the company said it would launch Electron rockets for three NASA missions<\/a> from its New Zealand site.<\/p>\n In May, Rocket Lab announced a $30-million contract<\/a> with Costa Mesa defense contractor Anduril for multiple hypersonic test flights in Virginia using Rocket Lab\u2019s HASTE launch vehicle.<\/p>\n The company is among scores of businesses that have revitalized Southern California\u2019s aerospace and defense industries<\/a> since SpaceX was founded in 2002. SpaceX, now headquartered in Texas maintains operations in Hawthorne.<\/p>\n