Rocket Lab said on Monday that it will buy Iridium, the satellite communications company, in a deal paid in cash and Rocket Lab shares that values Iridium at about $8 billion.
Peter Beck, who founded Rocket Lab and runs it, announced the purchase in a short promotional video. “We believe this will be one of the most transformative deals in the space industry,” he said. “It’s the ultimate combination for growth.”
Iridium is an older company with a record of profit. Its 80 satellites in low-Earth orbit carry telecommunications services, and it currently has 2.55 million customers around the world. It also holds a large block of L-band spectrum. A positioning, navigation and timing service, offered as an alternative to GPS, is in development at the company.
Beck’s pitch
For Rocket Lab, which is best known for launching rockets, the purchase is a way into what Beck called “space applications.” That means selling services delivered from orbit, such as voice and internet links, instead of only launching the satellites that provide them. Beck said that is where most of the revenue in the space industry sits.
He laid out the math in his own terms. “This is a deal where one plus one equals three,” he said. Rocket Lab, in his telling, brings “unfettered access to space and the ability to build spacecraft at scale,” along with missions “for people that matter.”
Iridium brings what Beck described as an already operational constellation, “extremely valuable spectrum,” millions of customers and a profitable business. Together, he said, they make “a fully integrated, self-launching space superpower.”
Beck said Rocket Lab plans to “unlock” more growth from the satellites Iridium already has in orbit. It also intends to build new constellations to offer additional services from space.
Iridium’s side
Matt Desch has led Iridium as chief executive for many years. He said the combination would let the company roll out new services more quickly.
