By Robb M. Stewart

Rocket Lab is buying Iridium Communications in a deal worth about $8 billion, bringing together the space systems and launch specialist with a global mobile satellite business.

The move will broaden Rocket Lab's reach and create a space company that covers launches, spacecraft, spectrum and on-orbit communications, providing it with immediate access to a constellation of low-earth orbit satellites.

Rocket Lab said Monday that it has entered into a definitive agreement that will see Iridium shareholders receive $27 in cash and a number of Rocket Lab shares for each share held. The number of Rocket Lab shares will be based on an exchange ratio when the transaction closes and is subject to a collar that has a notional value of $54 per Iridium share, implying an enterprise value for the company of roughly $8 billion.

The combination will merge two innovative American companies at a time of rapid expansion for the U.S. space economy. Rocket Lab said that rather than simply continuing the Iridium network, it will build on it to scale into untapped markets and pioneer new space-based services.

Founded two decades ago in New Zealand but now based in California, Rocket Lab launches small-payload rockets mostly into low-Earth orbit. It plans to launch its first so-called medium-lift rocket this year.

"This is a defining moment for the space industry and the start of a new era of strategic, accelerated growth for Rocket Lab and Iridium," said Peter Beck, founder and chief executive of Rocket Lab.

The transaction is expected to be completed in mid-2027, subject to the satisfaction of customary closing conditions, including approval from Iridium stockholders and regulators.

As part of the transaction, Rocket Lab said it has received commitments for a $3.6 billion 364-day senior secured bridge term loan facility from Deutsche Bank and Wells Fargo. It plans to fund the cash component of the transaction through a combination of cash from its balance sheet and other debt and equity financing sources.

Rocket Lab said the deal has been unanimously approved by the boards of directors of both companies, and each director of Iridium holding shares of the company has entered into a voting agreement to support the deal.

Rocket Lab said the acquisition diversifies its financial profile, bringing with it recurring cash flow streams. Virginia-based Iridium last year recorded revenue of $871.7 million.

Write to Robb M. Stewart at [email protected]