On the 1st of March, Vector Acquisition Corp (NASDAQ: VACQ) announced its plans to take Rocket Lab public via a reverse merger. Rocket Lab is an end to end, aerospace manufacturer and small satellite launch service.
To add to its credentials, in the history of spaceflight Rocket Lab is one of only two private companies that has delivered regular and reliable access to orbit, the other company being Elon Musk’s SpaceX. Furthermore, the merger transaction is expected to provide Rocket Lab capital to fund the development of a reusable Neutron launch vehicle.
The vehicle is tailored for mega constellations, deep space missions and human spaceflight. With the shareholder vote set for the 20th August, this article will breakdown everything you need to know about the Rocket Lab and VACQ merger.
Table of contents
Key details surrounding VACQ and Rocket Lab merger
Firstly, the merger will raise $470 million from committed PIPE investors alongside an additional $320 million from Vector Acqusitions Trust Account. The VACQ merger is valued at $4.1 billion pro forma. In addition, the merger vote is expected to take place on August 20. This marks one of the final steps of the merger process.
The combined company will trade on the Nasdaq, under the ticker symbol RKLB. This will allow for investors to purchase RocketLab shares directly from the stock market.
Furthermore, the cash proceeds from the transaction will also help fund growth in the space systems and applications market, enabling Rocket Lab to deliver data/servicesnfrom space. The space systems and applications industry is expected to grow to $1.4 trillion by 2030.
“Rocket Lab is ideally positioned to continue to capture market share in the rapidly expanding space launch, systems and applications markets.”
RocketLab stock forecast over the next 5 years
Firstly, Rocket Lab has completed 18 seperate missions and launched 97 satellites to date. The company expects to generate $69 million in revenue in 2021 (96% YOY growth) and expects this to grow to $176 million in 2022.
By 2025, Rocket Lab forecasts revenue to reach upwards of $749 million. RocketLab expects both space systems and launch revenue to equally drive this 5 year growth forecast.
The 5 year outlook on revenue according to Rocket Lab look bullish, however the risk in space applications remains high. For Rocket Lab to meet these forecasts, they will need to ensure assumptions regarding expansion into the space systems and applications industry is successful.
In saying this, its space systems business already has scheduled missions to the Moon in 2021 and Mars in 2024.
The bottom line – VACQ Rocket Lab merger
In conclusion, the merger looks to provide an exciting new chapter for Rocket Lab and VACQ investors. Furthermore, the funds raised from the transaction will allow for expansion into the space systems and applications market.
The revenue forecasts as discussed suggest strong growth in both the launch and space systems industry. However, investors should tread with caution as many hurdles will need to be cleared by the company due to the nature of its emerging industry.
Lastly, the merger is expected to close sometime shortly after the shareholder meeting scheduled for the 20th August, assuming the merger is approved by VACQ shareholders.
Written by Tyger Fitzpatrick, Founder of Youth Investment Group.
The information above is not financial advice. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.
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