Virgin Galactic merger wins shareholder approval
WASHINGTON — Virgin Galactic will go public next week after shareholders in a holding company approved a merger with the suborbital spaceflight firm Oct. 23.
In a filing with the U.S. Securities and Exchange Commission, Social Capital Hedosophia (SCH), the special-purpose acquisition company that announced plans to merge with Virgin Galactic in July, reported that shareholders overwhelmingly approved the merger.
The merger proposal won more than 95% of the 61.35 million votes cast during an “extraordinary general meeting” of SCH shareholders Oct. 23. Other aspects of the proposed merger, including incorporating the merged company in Delaware and selecting a slate of directors, won approval by similar margins.
The approval of SCH shareholders was one of the final milestones before the merger with Virgin Galactic could be closed. SCH said in its filing that it expected the merger to close Oct. 25, “subject to customary closing conditions.”
SCH, a publicly traded company established with the sole purpose of acquiring another company, is traded on the New York Stock Exchange under the ticker symbol IPOA. The company said it expects the merged company to start trading Oct. 28 under the Virgin Galactic name and the ticker symbol SPCE. Virgin Galactic founder Sir Richard Branson, speaking at a conference in Israel Oct. 23, said he planned to be at the exchange Oct. 28 to ring the opening bell, according to Israeli media reports.
The merger will make Virgin Galactic the first publicly traded company whose primary line of business is human spaceflight. Large aerospace companies such as Boeing, Lockheed Martin and Northrop Grumman have long been traded on stock exchanges, but space is only a small part of their overall business.
The merger will also provide Virgin Galactic with several hundred million dollars in capital. The company said in an investor presentation filed with the SEC Sept. 26 that the merger will provide the company with $774 million, with about $320 million going to shareholders selling their stock as well as transaction fees. The remaining $452 million will be cash added to its balance sheet to fund its transition to operations.
Virgin Galactic is still testing its first operational SpaceShipTwo, VSS Unity, which last flew in February. In a presentation at the 70th International Astronautical Congress here Oct. 23, Clare Pelly, head of the astronaut office at Virgin Galactic, said the company expected to transport the vehicle from the company’s manufacturing facility in Mojave, California, to Spaceport America in New Mexico “around the end of the year.”
That will be followed by a final series of test flights before commercial operations begin. Pelly confirmed that Branson will be on the first commercial flight, something he has long said he would do. She did not state when commercial service will begin, but the company’s investor presentation based its financial projections on a start of commercial flights in June 2020.
The merger will also clear the way for Boeing to make a $20 million investment in Virgin Galactic announced Oct. 8. The companies said then that they planned to work together “to broaden commercial space access and transform global travel technologies,” but offered few specifics. That work is expected by many in the industry to focus on high-speed point-to-point passenger transportation rather than spaceflight applications.
The Boeing investment was just part of a wave of announcements from Virgin Galactic in recent weeks that included an agreement with the Italian Air Force for a suborbital research flight on SpaceShipTwo as well as the company’s reveal of the flight suits its customers will wear on those flights.
On Oct. 23, Virgin Galactic announced that its customers will receive pins from the Association of Space Explorers, the professional organization of space travelers. That pin will serve as recognition of their flights in lieu of membership in the organization, which is open to those people who have completed one orbit of the Earth.
Virgin Galactic is also in the process of shifting personnel from Mojave to New Mexico in anticipation of starting operations next year at Spaceport America. George Whitesides, chief executive of Virgin Galactic, said at an Oct. 9 presentation at the International Symposium for Personal and Commercial Spaceflight in Las Cruces, New Mexico, that the company has 120 employees in the area now, with 40 more coming by the end of the year. By comparison, it had just 40 in New Mexico one year earlier.
“There’s never been as much activity with the Virgin Galactic business and the Virgin Galactic program as today,” he said. “It’s been a long road, but the future is really bright right now.”