Social Capital Hedosophia to Combine with Branson’s Virgin Galactic
by Kristi Marvin on 2019-07-09 at 7:50am

Social Capital Hedosophia Holdings Corp. (IPOA) just radioed Major Tom this morning to tell him he “really made the grade”. If you haven’t heard yet, IPOA announced this morning that they have signed a definitive agreement with Richard Branson’s Virgin Galactic (“VG”), to combine and create the first publicly traded company dedicated to human spaceflight.

In connection with the transaction, IPOA intends to make an $800 million commitment with the combined company having an enterprise value of $1.5 billion. Additionally, Social Capital Hedosophia Founder and CEO, Chamath Palihapitiya, will invest an additional $100 million in the transaction at $10.00 per share and will become Chairman of the combined entity.

The selling equity owners of Virgin Galactic will receive $1.3 billion in total consideration, inclusive of $1.0 billion of common stock of the combined company valued at $10.00 per share and up to $300 million in cash consideration. Assuming no redemptions by the public shareholders of IPOA, current Virgin Galactic shareholders and current holders of IPOA will hold approximately 51% and 49% of the combined company, respectively, at closing.

Pro forma enterprise value of the merger is $1.5 billion and represents:

  • 1.5x invested capital ($1 billion+ of capital invested to date)
  • 2.5x estimated revenue for 2023
  • 5.5x estimated EBITDA for 2023

Virgin Galactic already has customer reservations from more than 600 people in 60 countries representing approximately $80 million in total collected deposits and $120 million of potential revenue.  Additionally, Virgin Galactic has already been granted its FAA commercial space launch license, and the New Mexico Spaceport has also received its Spaceport license.

Whether you love or hate this transaction, the combined hype beasts of Chamath Palihapitiya and Richard Branson, should generate significant interest in this deal.  As a result, the share price should “take a moon shot” today.  Interestingly, the advisor to Virgin Galactic was none other than M Klein, the firm of Michael Klein, of Churchill I & II, which clearly has some SPAC experience under the belt. As of yet, there are no details on a forthcoming conference call or any filed documents, but we’ll update as additional information becomes available.

ADVISORS

  • Credit Suisse acted as capital markets advisor
  • Skadden, Arps, Slate, Meagher & Flom LLP acted as legal advisor to Social Capital Hedosophia.
  • M Klein and Company served as financial advisor to Virgin Galactic and Virgin Group for the merger with Social Capital Hedosophia.
  • LionTree Advisors and Perella Weinberg Partners served as financial advisors to the company regarding its capital raising alternatives.
  • Latham & Watkins LLP acted as Virgin Galactic and Virgin Group’s legal advisor.

 

Social Capital Hedosophia to Combine with Branson’s Virgin Galactic
Recent Posts
by Nicholas Alan Clayton on 2025-07-03 at 12:54pm

Crown PropTech (OTC:CPTKW) has entered into a definitive agreement to combine with rare earth mining firm Mkango Resources (TSX-V:MKA) at a pre-money equity value of $400 million. London-based Mkango is working to commercialize a chain of rare earth mining and refining facilities in Africa and Europe. The combined company is expected to trade on the...

by Nicholas Alan Clayton on 2025-07-03 at 8:27am

At the SPAC of Dawn One of the biggest sources of uncertainty in the SPAC market in recent years has been regulatory changes, but new shifts could be in its favor. SEC Chairman Paul Atkins told CNBC yesterday that the commission would review the rules for SPACs after “rather controversial” changes to the rules passed...

by Nicholas Alan Clayton on 2025-07-02 at 12:13pm

McKinley Acquisition Corporation (NASDAQ:MKLYU) has filed for a $150 million SPAC to hunt for an innovative target company with an experienced financial team that has dabbled in SPACs before. The new SPAC is offering investors one right to a 1/10 share in each unit with no overfunding of the trust, but it could provide a...

by Nicholas Alan Clayton on 2025-07-02 at 8:29am

At the SPAC of Dawn The rain of SPACs has continued with four expected to make their debuts during today’s trading sessions after pricing their IPOs overnight. The largest of these, EQV Ventures II (NASDAQ:EVACU), even managed an upsize, making it the largest SPAC IPO since Ares II (NYSE:AACT) pulled together $450 million in 2023....

by Nicholas Alan Clayton on 2025-07-02 at 6:28am

EQV Ventures II (NASDAQ:EVACU) announced the pricing of its upsized $420 million IPO and its units are expected to begin trading on the Nasdaq under the symbol “EVACU”, Wednesday, July 2, 2025. The new SPAC plans to merge with an energy target involved in upstream exploration or production. EQV II’s management team is led by...

logo

Copyright © 2025 SPACInsider, Inc. All Rights Reserved