Rocket Lab recently executed a non-binding term sheet to acquire a controlling ownership stake in Mynaric subject to completing a previously announced restructuring plan and regulatory review process

Rocket Lab USA, a global leader in launch services and space systems, today announced it has entered into a non-binding term sheet with certain lenders (together, the “Lenders”) to acquire, subject to receipt of certain governmental approvals including those described herein, a controlling equity position in Mynaric AG (“Mynaric”). Mynaric is a leading provider of laser optical communications terminals for air, space, and mobile applications. The transaction is expected to close following the completion of Mynaric’s previously announced and pending StaRUG restructuring proceedings under German law, the completion of which would result in certain outstanding debt held by the Lenders converting into 100% of the equity of Mynaric (the “StaRUG Restructuring”) – subject to receipt of applicable regulatory approvals.

The acquisition, if accomplished, is expected to further strengthen Rocket Lab’s proven capabilities as a leading launch provider, spacecraft manufacturer, and supplier of satellite components at scale. Rocket Lab may fund this and other future acquisition opportunities with proceeds from equity offerings.

Strategic Importance of the Deal:

• Laser communication has become a pain point for constellation operators, with products not readily available in high volumes at an affordable price. Through previous acquisitions Rocket Lab has proven its ability to take satellite subsystems and components previously only available in subscale quantities with long lead times and make them affordable and available at scale. Rocket Lab intends to do the same with Mynaric’s optical terminals to serve a growing list of customers and large constellations.

• With an initial purchase price expected to be approximately $75 million, representing a fraction of the over $300 million invested in Mynaric to-date, Rocket Lab would establish its first European foothold in Munich, Germany, with a team of 300+ talented engineers and staff, opening up incremental European growth opportunities across Rocket Lab’s products and services offerings.

• Rocket Lab would acquire extensive production assets, Intellectual Property, product inventory and committed backlog related to satellite-to-satellite optical connectivity solutions for next generation constellations, augmenting Rocket Lab’s already extensive portfolio of satellite components, subsystems and software. This acquisition, if completed, would support Rocket Lab’s ability to further vertically integrate the manufacture and management of its own future high-value satellite application ambitions.

A key driver for this proposed acquisition is that Mynaric is already a subcontractor to Rocket Lab, providing CONDOR Mk3 optical communication terminals for the Company’s $515 million prime contract with the Space Development Agency (SDA) to produce 18 satellites for the Tranche 2 Transport Layer-Beta. Mynaric is also a supplier into other SDA contracts, and Mynaric and Rocket Lab share many customers spanning commercial constellation operators, prime contractors, and defense and civil government agencies. Rocket Lab intends to scale production and introduce efficiencies to Mynaric’s existing manufacturing capability to further support SDA and other opportunities, providing these customers with improved confidence and assurance their terminals will be delivered on schedule and on budget.

Rocket Lab founder and CEO Sir Peter Beck said: “We have been very clear about this strategic direction for several years now – Rocket Lab is pursuing every part of the space value chain. We launch our own rockets, we build satellites in constellation volumes, and now we’re closing in on the final step and most valuable part of the space economy – operating our own constellations to provide data and services from space using our newly announced Flatellite spacecraft. Mynaric has paved the way in developing laser technology. Their team and technologies will make a compelling addition to our satellite component portfolio and we look forward to making the technology available at scale for our own constellations and those of our customers.”

The non-binding term sheet entered into with the Lenders provides for a proposed acquisition of Mynaric by Rocket Lab following the completion of the StaRUG Restructuring on terms acceptable to Rocket Lab. After the completion of the StaRUG Restructuring and subject to execution of a definitive agreement, Rocket Lab would acquire 100% of the outstanding equity interests of Mynaric. The initial purchase price is expected to be $75 million payable in either cash or shares of common stock of Rocket Lab, at Rocket Lab’s option, with the potential for additional earn-out consideration based on future revenue targets of the Mynaric business of up to an additional $75 million in shares of Rocket Lab common stock or cash, at Rocket Lab’s option. The initial closing purchase price will also be increased (and the potential earnout consideration correspondingly decreased) to the extent of any additional cash investment by the Lenders or their affiliates in Mynaric after completion of the StaRUG Restructuring and before the closing of the potential acquisition.

The non-binding term sheet provides for an exclusive negotiating period between Rocket Lab and the Lenders and is subject to completion of customary due diligence by Rocket Lab and the negotiation and entry into a definitive purchase agreement between the parties. The definitive agreement will also include customary covenants and closing conditions, including required regulatory approvals and termination rights. There can be no assurances that Rocket Lab will enter into a definitive agreement or complete the acquisition. Mynaric is not a party to the non-binding term sheet and Rocket Lab is not offering to acquire and will not acquire any of the currently outstanding equity interests of Mynaric AG. Among other conditions, the proposed acquisition will be conditioned on the completion of the StaRUG Restructuring and prior elimination of all such outstanding equity interests without any consideration, as contemplated by Mynaric’s previously announced StaRUG Restructuring plan.

Source: BUSINESS WIRE