Rocket Lab to expand its California footprint in Virgin Orbit bid24th May 2023
It is a sad day for Sir. Richard Branson’s Virgin Orbit after the 2017-born business’s assets have officially been sold to three companies. After a 9th January failure to reach orbit, the furlough of hundreds of staff, and the filing for Chapter 11 bankruptcy as a last-ditch effort to save the company, the major assets were sold to Rocket Lab, Launcher Inc., and Stratolaunch. This marks the end of Virgin Orbit as we know it. The woes of Virgin Orbit’s fate will be felt among the space industry, especially with the company’s hundreds of employees. However, Rocket Lab is the latest company to pick up pieces of Virgin Orbit, and the move could be a game-changer for the California-based company.
Who won what
On 23 May, the three companies each won bids to purchase assets from Virgin Orbit, according to filings released from Delaware’s bankruptcy court. According to the filings, Rocket Lab won the auction for Virgin’s factory in Long Beach, California, including the machinery, equipment, and lease. The company bagged the Conant Street factory for just over $16 million (£13 million).
Launcher Inc. – a subsidiary of space station company Vast – a rocket and transfer vehicle developer also based in California, won a bid for VO’s site in the Mojave desert, including its machinery, equipment, and inventory. Launcher Inc. acquired the assets for $2.7 million (£2.1 million).
Lastly, the hypersonic flight company Stratolaunch won the bid for Virgin’s Cosmic Girl 747 aircraft and its related assets for $17 million (£13.7 million).
There will be an additional sale hearing on Wednesday, 24th May, in the Bankruptcy Court for the District of Delaware. The sale of Virgin Orbit’s assets marks the end of a long fight for investors to purchase the company and its intellectual property, which was worth $3.7 billion when it went public in August 2021. Sadly, it also comes as a major loss, as the assets bought only equal $36 million, representing less than 1% of the company’s entire worth.
In a statement released to CNBC, Virgin Orbit said:
As Virgin Orbit embarks on this path, the management and employees would like to extend their heartfelt gratitude to all stakeholders. Virgin Orbit’s legacy in the space industry will forever be remembered. Its groundbreaking technologies, relentless pursuit of excellence, and unwavering commitment to advancing the frontiers of air launch have left an indelible mark on the industry
Rocket Lab became the latest company to benefit from Virgin Orbit’s losses, as the company announced on Tuesday, the 23rd of May that it was selected as the successful bidder of the manufacturing unit. Rocket Lab, first founded in New Zealand, is based now in California, hosts small launches with its longstanding Electron rocket, and is currently building its partly reusable medium-lift platform, Neutron. The company claims Electron is the second most frequently launched rocket in the US.
What Rocket Lab gains
As detailed in a company statement, Rocket Lab will have access to Virgin Orbit’s 144,000 square foot headquarters complex at 4022 E. Conant Street in Long Beach, California, certain production assets, machinery, and equipment.
The company said in its statement:
The combination of these assets with Rocket Lab’s existing production, manufacturing, and test capabilities is expected to advance the production of Rocket Lab’s larger launch vehicle, Neutron. Rocket Lab will not be integrating Virgin Orbit’s launch system within its existing launch services.
Neutron is Rocket Lab’s second rocket, announced in March 2021, and will be capable of delivering 13,000 kilograms to low Earth orbit (LEO), and 1,500 kilograms to Mars and Venus. It is being built to mostly serve mega constellations, human spaceflight, and deep space exploration.
CEO and co-founder Peter Beck said:
With Neutron’s design and development well-advanced, this transaction represents a capital expenditure savings opportunity to augment our production capability to bring Neutron to the launch pad quickly to serve our customers and their future success. Securing the lease to the Conant Facility adds to our existing presence in Long Beach and provides co-located engineering, manufacturing, and test capabilities for our Neutron team.
A good fit for Rocket Lab?
While Rocket Lab’s winning bid is undoubtedly a steal, the company is yet to detail how it will use the massive manufacturing facility and its equipment. However, there are a few obvious reasons it may be the good fit.
Firstly, Rocket Lab’s headquarters is less than a 15-minute walk away from Virgin Orbit in Long Beach. This will be convenient for Rocket Lab, and will further expand the company’s footprint in California, including broadening its manufacturing capabilities.
Rocket Lab said in its press release that this purchase of assets will be most beneficial for its Neutron rocket, which is being developed in a facility adjacent to Launch Complex 2 at the Mid-Atlantic Regional Spaceport in Virginia. While Virginia will remain Rocket Lab’s manufacturing site for Neutron, its Archimedes engines, which will power Neutron, are a similar size to LauncherOne’s NewtonThree rocket engine and therefore could benefit from the California facility.
Further, both companies operate similar manufacturing processes, like additive manufacturing, 3D printing, and both use carbon fiber composites for their rockets.
Even without any of the reasons listed above, California remains one of the biggest space hubs in the world, and Rocket Lab’s expanded footprint there will benefit the company greatly. While there is still much to be considered, such as whether any of the three companies will take on Virgin Orbit’s former staff, or what they will do with the assets acquired, it will mark a big shift for the UK and US space industry.