Rocket Lab NASDAQ:RKLB shares climbed nearly 10% on Monday after the space company agreed to acquire Iridium Communications (IRDM) in a transaction valued at about $8 billion, according to a Monday press release.
Under the terms of the agreement, Iridium shareholders will receive $54 per share, consisting of $27 in cash and the remainder in Rocket Lab stock. The transaction would combine Rocket Lab's launch operations with Iridium's satellite communications network, which serves aviation, maritime, internet-of-things, and positioning markets.
Rocket Lab said the acquisition is expected to expand its presence across the space economy by adding a large satellite services platform to its existing rocket and spacecraft businesses. The deal could also provide Rocket Lab with a recurring customer base for future launches and satellite deployments.
Iridium operates one of the world's largest commercial satellite constellations and provides connectivity services to government and commercial customers worldwide. The proposed combination may strengthen Rocket Lab's ability to compete in satellite-based communications markets that have attracted growing investment in recent years.
Rocket Lab shares were last up about 9%, while Iridium surged more than 21% following the announcement.