GoKawiilRocket Lab announced on Monday that it is acquiring the satellite communications company Iridium. The deal, made for cash and shares of Rocket Lab stock, values Iridium at about $8 billion.
The deal pairs the launch company, founded and led by Peter Beck, with a decades-old profitable satellite company whose network of 80 satellites in low-Earth orbit provides telecommunications services.
“We believe this will be one of the most transformative deals in the space industry,” Beck said in a short promotional video announcing the deal. “It’s the ultimate combination for growth.”
Missions that matter
Beck said the deal provides a shortcut for Rocket Lab to enter the “space applications” business—that is, providing space-based services rather than launching the satellites that offer voice, Internet, and other communication services to customers on Earth. This is where the majority of revenue in the space industry lies.
“This is a deal where one plus one equals three,” he said. “One being Rocket Lab—we have unfettered access to space and the ability to build spacecraft at scale. We also do missions for people that matter. Then you think of Iridium, they have an already operational constellation; spectrum, and not just any spectrum but extremely valuable spectrum; millions of customers and they’re a profitable business. The result of these two things is a fully integrated, self-launching space superpower.”
Iridium holds a substantial chunk of L-band spectrum, and the company currently serves 2.55 million customers around the world. In addition to its telecommunications capabilities, the company is also developing a commercial position, navigation, and timing service as an alternative to GPS.
Beck said Rocket Lab will “unlock” more growth from Iridium’s existing network of satellites and build new constellations to provide additional services from space.
Longtime Iridium chief executive Matt Desch said the move would allow Iridium to deploy new services more quickly.