M&A
December 16, 2021
4 minutes read

Space Company Rocket Lab Buys Solar Panel Maker SolAero For $80M

Rocket Lab (NASDAQ: RKLB), a space launch company, has continued its acquisition spree with its third purchase in three months.…

Rocket Lab (NASDAQ: RKLB), a space launch company, has continued its acquisition spree with its third purchase in three months. This time, it’s acquiring SolAero Holdings, a company that makes solar cells and panels to power satellites in outer space. Rocket Lab will pay $80mn in cash to buy SolAero, a solid exit for the two-decade-old company that doesn’t seem to have taken VC funding at any point in time.

This acquisition is a strategic one for Rocket Lab. In a bid to expand its business outside just space launches and become a “vertically integrated” space company, Rocket Lab is acquiring companies that provide services crucial to the space launch industry. In October, it bought Advanced Solutions, a provider of simulation and testing software for space missions; in November, Planetary Systems, a company that makes spacecraft separation systems; and now SolAero, a maker of solar panels for satellites.

Rocket Lab wants to be an end-to-end provider for all the processes involved in launching satellites into orbit. Expanding its product portfolio is crucial to achieving that goal. SolAero’s solar panels are critical to feeding satellites power in outer space, such as NASA’s Ingenuity robotic helicopter flying on the planet Mars, for which SolAero provided solar panels.

NASA's Ingenuity helicopter deployed on Mars. — NASA’s Ingenuity helicopter deployed on Mars.

SolAero’s space solar panels are in high demand from both public and private space firms, such that it has $153mn worth of backlogged contracts it’s yet to deliver on, according to a Rocket Lab investor presentation. Rocket Lab says it expects $20mn of additional revenue per quarter once it completes the acquisition, a reasonable thing to obtain for an $80mn lump sum.

SolAero has 425 employees that’ll join Rocket Lab, increasing its total headcount to 1,100. Post-acquisition, SolAero will remain based in New Mexico and led by CEO Brad Clevenger as a Rocket Lab division. Critical to SolAero’s operations is a 155,000-square-foot factory in New Mexico, so it’s no surprise the company will remain there.