By Micah Maidenberg

Rocket Lab agreed to buy Iridium Communications, a deal that would give it control over a satellite fleet and access to wireless resources it could use to compete with SpaceX.

The cash-and-stock deal values shares of Iridium at $54 each, suggesting an $8 billion enterprise value for the McLean, Va.-based company, Rocket Lab said Monday. Iridium's stock ended last week at $43.52 and has gained ground lately as investors bet on the value of its spectrum holdings.

SpaceX's satellite offerings are gaining traction among consumers and government customers, heaping pressure on competitors and prompting a wave of consolidation across the industry. Iridium has faced questions in recent months about the threat SpaceX poses to its business using satellites to connect specialized phones.

Several longstanding satellite companies have found partners, including Globalstar, which in April agreed to be taken over by Amazon.com. Luxembourg-based satellite operator SES last year completed its acquisition of Intelsat. SpaceX itself agreed to purchase spectrum holdings from EchoStar.

Rocket Lab said Monday the deal would marry its launch and satellite manufacturing capabilities with Iridium's global reach and spectrum assets. In the future, Rocket Lab plans to use those resources to develop an upgraded satellite fleet that would replace Iridium's current constellation.

Shares of Rocket Lab jumped 6.8% in Monday morning trading. Iridium shares gained 20.8%.

Iridium operates 66 satellites in low-Earth-orbit right now that connect handsets and other devices used by ships, mining sites, U.S. government agencies, and other customers. Its spectrum rights can be used around the globe, making them especially valuable.

Iridium's satellites can operate at least another decade, Rocket Lab Chief Executive Peter Beck said, giving his company time to create the future network.

"Not only do we get an amazing spectrum that we can build on, but we get a business that's already generating cash," Beck said in an interview. Iridium generated $114 million in net income last year on $872 million in revenue.

Rocket Lab got its start as a launch provider two decades ago but has been acquiring businesses tied to satellite production and operations in recent years. Executives at the company have said they wanted to operate their own satellite fleet, and not just launch and build satellites for outside clients.

Iridium pioneered low-Earth-orbit satellite networks, with its first satellites launched almost 30 years ago. It soon went bankrupt, but reorganized.

SpaceX's Starlink satellite division emerged later, with the company using its own rockets to keep costs in check while creating a fleet of about 10,000 satellites.

Matt Desch, CEO of Iridium since 2009, said the deal would allow the combined company to ramp up growth and bring more satellite-related projects in house, helping to lower internal costs.

"The real winners are going to be those who are vertically integrated," Desch said of space companies. "Not many can do that, but those that can will have the ability to make business cases work a lot better."

Write to Micah Maidenberg at [email protected]