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Branson Wants to Take Virgin Orbit Public Through SPAC

By Doug Messier
Parabolic Arc
March 12, 2021
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Virgin Orbit Cosmic Girl Boeing 747 takes off from the Mojave Air and Space Port. (Credit: Virgin Orbit)

First Virgin Galactic. Now Virgin Orbit.

The Wall Street Journal reports that Richard Branson has hired Credit Suisse Group AG and LionTree LLC to take Virgin Orbit public through a special purpose acquisition company (SPAC) at a valuation of up to $3 billion.

The move represents the latest effort by Mr. Branson to take advantage of a recent boom in similar, blank-check listings. His Virgin Group has played on both sides of the SPAC craze: In 2019, he listed his space-tourism company,  Virgin Galactic Holdings Inc., by merging it with a SPAC, essentially a pool of money with a stock-market listing.

Then in February, a Virgin-backed blank check company said it would merge with 23andMe Inc. in a deal that valued the genetic-testing company at $3.5 billion, including debt….

Mr. Branson’s company owns 80% of Virgin Orbit, with Mubadala Investment Co., the United Arab Emirates sovereign-wealth fund, owning the rest.

The targeted valuation would mark a significant jump from the $1 billion the rocket startup had been aiming for last year, from a previously planned private fundraising. The company still hasn’t ruled out a private fundraising but is now focused on a SPAC, these people said.

SPACs are investment vehicles that are already publicly traded on a stock exchange. They acquire or merge with company that then go public under their own names.

Virgin Galactic went public on the New York Stock Exchange on Oct. 28, 2019, after an $808 million merger with Chamath Palihapitiya’s Social Capital Hedosophia.

Virgin Galactic’s stock has risen significant despite the fact that the company’s schedule for flying tourists on suborbital flights has slipped about 18 months. Virgin Galactic suffered a net loss of $273 million last year on minimal revenues.

Branson sold off hundreds of millions of dollars worth of shares last year to help bail out his travel-focused Virgin Group, which has been hit hard by the global COVID-19 pandemic.

Palihapitiya recently sold off his personal stake in the company worth about $311 million. He continues to indirectly own shares in Virgin Galactic through Social Capital.