On August 23, blank check company NextGen Acquisition Corp. II announced that it has entered into a definitive merger agreement with private aerospace company Virgin Orbit LLC in a pending $3.2 billion deal. The deal will see Virgin Orbit become publicly traded on Nasdaq via a business combination with SPAC NextGen (Nasdaq: NGCA).
Upon closing, which is expected to occur around the end of 2021, the combined company’s common stock is expected to trade on Nasdaq under “VORB.” Furthermore, the deal will secure up to $483 million in growth capital (assuming no redemptions) including $100 million fully-committed PIPE investment offering at $10 per share and the remainder will be cash held in trust to NextGen.
Accordingly, Virgin Orbit’s existing shareholders (Virgin Group and Mubadala Investment Company, management and employees) will be able to roll all of their equity into the combined company and, if no redemptions by NextGen, shareholders will keep ownership of about 85% of the combined company; NextGen’s public shareholders will own approximately 10% of the combined company; PIPE investors will own about 3% and the SPAC sponsor about 2%.
Upon domestication, NextGen will be renamed Virgin Orbit Holdings, Inc. The private target merger utilizes equity as consideration and is structured as a reverse triangular merger and includes a no-shop provision.
Virgin Orbit is represented by Latham & Watkins LLP and its financial advisors are Credit Suisse Securities (USA) LLC and Perella Weinber Partners L.P. along with LionTree LLC. NextGen Acquisition Corp. II is represented by Skadden, Arps, Slate, Meagher & Flom LLP and its financial advisors are Goldman Sachs & Co. LLC as well as Rothschild & Co. Sullivan & Cromwell LLP is the legal advisor to the placement agents.
The deal is waiting for the approval of NextGen’s shareholders and to satisfy or waive other customary closing conditions, among other terms.
