Rocket Lab Grows Backlog by 30%, Acquires Space Separation Systems Company PSC
In the span of 24 hours, New Zealand’s Rocket Lab reported a 360% increase in third quarter 2021 space systems revenue, a 30% increase in total backlog, and the execution of an agreement to acquire spacecraft separation systems company Planetary Systems Corporation (PSC).
The private launch company’s Q3 fiscal report showed strong growth in demand for its Electron launch vehicle. Its new constellation customers include: IoT connectivity provider Kinéis, which will deploy 25 satellites across five dedicated Electron launches; and geospatial intelligence constellation operator BlackSky, which signed a five-launch contract earlier this year. Overall, constellation operators helped boost the company’s backlog from $183 million at the end of September to $237 million in mid-November.
Rocket Lab’s Q3 revenue came in at $5.3 million. The company forecasts Q4 revenue between $23 million and $25 million. The company’s massive 360% jump in Space Systems revenue means it now represents 27% of its total revenue so far this year. Rocket Lab also completed its SPAC merger with Vector Acquisition Corp., resulting in a total cash balance of $792.7 million after the transaction. Shares of Rocket Lab increased approximately 3% in value immediately following the Q3 update.
The same day as its Q3 report, Rocket Lab announced it had reached an agreement to acquire PSC, a Maryland-based spacecraft separation systems company, for $42 million in cash and 1,720,841 shares of its common stock. Rocket Lab also offered an additional 956,023 shares of common stock as an incentive for a performance earnout based on PSC’s 2022 and 2023 financial results.
PSC’s separation systems are used to separate satellites from rockets. Its systems have been integrated in launch vehicles from launch providers including Rocket Lab, SpaceX, United Launch Alliance, Northrop Grumman, NASA, Arianespace, the Indian Space Research Organization (ISRO), the Japan Aerospace Exploration Agency (JAXA), and others.
Rocket Lab CEO Peter Beck said that the acquisition will enable Rocket Lab to leverage PSC’s product line across its vertically integrated Space Systems division of Photon satellite buses and spacecraft components solutions. The deal also enables PSC to make use of Rocket Lab’s resources and manufacturing capability to grow their commercial hardware business.
The acquisition is expected to close in the fourth quarter of 2021. PSC’s President and CEO Mike Whalen will continue to lead his team of 25 people in Maryland. The company’s founder, Walter Holemans will remain in his role of chief engineer.