Shares of Rocket Lab (NASDAQ: RKLB) climbed sharply higher on Monday, gaining as much as 12.9%.
ET, the stock was still up 8.9%. The catalyst that sent the rocket specialist higher was a “transformational” deal that will better position the company in the space race. Blasting into orbit Rocket Lab announced it will acquire satellite communications provider Iridium Communications (NASDAQ: IRDM) for $54 per share in a cash-and-stock deal valued at roughly $8 billion.
Rocket Lab called the deal “one of the most transformative deals in the space industry,” integrating its launch capabilities with Iridium’s global satellite communications system, global spectrum access, and its 2.55 million customers. Iridium also boasts a “500-plus strong partner ecosystem” of government, defense, aviation, maritime, and commercial users. William Blair analyst Louie DiPalma hailed the deal, saying, “While spectrum is the central asset, Iridium brings much more to the table for Rocket Lab than just spectrum.” The analyst highlighted Iridium’s new alternative position navigation and timing Application-Specific Integrated Circuit (ASIC).