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Rocket Lab struck an $8 billion deal to acquire satellite communications provider Iridium Communications yesterday, betting on a SpaceX-style advantage that combines a constellation of satellites with the in-house rockets that will launch them.
The transaction adds to growing momentum in the space sector, where investor appetite has surged since SpaceX raised about $86bn in the world’s largest IPO earlier this month.
The deal accelerates Rocket Lab’s long-time push beyond launch services by adding an established satellite network, its globally coordinated spectrum and millions of largely enterprise and government customers – assets that could have taken Rocket Lab several years and billions of dollars to build itself.
“We have a very profitable business being Iridium to start with, essentially a brand new constellation... And of course, the all-important spectrum,” founder and CEO Peter Beck told Reuters.
Rocket Lab said the deal will allow the company to expand Iridium’s Direct-to-Device business and launch into “untapped markets and pioneer new space-based services.”
Key to the company’s strategy of launching its own satellite constellations is Neutron, its reusable medium-lift rocket targeted to make its first flight in the fourth quarter of 2026.
Iridium shareholders will receive $27 in cash plus Rocket Lab shares, with a combined value of $54 per Iridium share – a 24.1pc premium to the stock’s last close. The deal is expected to close in mid-2027.
Rocket Lab shares jumped 10pc while Iridium shares, which have more than doubled in value already this year, soared about 22pc.
“By acquiring Iridium, Rocket Lab immediately secures an initial customer base and distribution network, which may prove even more valuable than the hardware, spectrum rights and other assets it gains as part of the deal,” said Micah Walter Range, president of space consulting firm Caelus Partners.
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