M&A for Spectrum: Rocket Lab (RKLB.US) Sets Its Sights on Iridium Communications Inc. (IRDM.US) L-Band, CEO Says Bluntly "Spectrum Cannot Be Conjured Out of Thin Air"

Notice that as Iridium Communications Inc. (IRDM.US) shareholders prepare to vote on Rocket Lab's (RKLB.US) proposed acquisition, Rocket Lab CEO Peter Beck said the deal would bring the rocket and satellite manufacturer a valuable asset that has already drawn the attention of SpaceX and Amazon.com, Inc.: spectrum. RKLB shares rose 3% on Tuesday to close at $71.98, marking a second consecutive trading day of gains. Iridium's spectrum is critical to Rocket Lab "The only thing you need to do communications is spectrum," Beck said in an MTS interview. "Spectrum is physics, and you can't conjure spectrum out of thin air." Beck cited SpaceX's and Amazon.com, Inc.'s spectrum investments as examples to explain why Rocket Lab wants Iridium. The deal would add a satellite communications services business to a company that already builds spacecraft and launches rockets. "I probably shouldn't have called it Rocket Lab, maybe I should have called it Space Lab," Beck said. "Rockets always steal the show." He said integrating launch, spacecraft, and services under one roof can reduce the cost and time required to deploy new networks. By his "back-of-the-napkin math," Beck estimated that Rocket Lab could have developed and deployed Iridium's constellation for about $350 million, while he estimated Iridium spent about $3 billion on it. He also said such a project might take only 12 to 24 months rather than more than five years. Beck called Iridium's L-band spectrum "a really loud voice" that can penetrate rain and buildings, making it highly valuable for defense and security-critical communications. He also mentioned its potential for alternative positioning services, saying its signal could be 1,000 times stronger than GPS and harder to jam. Iridium shareholders are scheduled to vote on the merger on Thursday. Rocket Lab has completed a $1.944 billion stock offering and terminated a previously arranged $3.6 billion bridge financing commitment, securing the cash needed for the proposed acquisition. The company expects the deal to close in mid-2027. Space Force bets on continued progress The company is pursuing the same integrated "build-launch-operate" model in the national security sector. In a recent X (Twitter) post, Rocket Lab said it had completed program initiation for a Space-Based Airborne Moving Target Indicator (SB-AMTI) demonstration project for the U.S. Space Force. The company said it will deliver Flatellite spacecraft equipped with sensing technology to help the military track airborne threats. The initiation follows the company's announcement last month that it received a $397 million contract award from the Space Force. Rocket Lab was tasked with developing, launching, and operating multiple Flatellites, to be carried by its yet-to-fly Neutron rocket. The contract includes options to purchase additional spacecraft, but Rocket Lab has not yet disclosed the number of satellites or launch dates. SpaceX separately received a $4.16 billion SB-AMTI contract award in May. The Space Force has said it plans to use multiple vendors in a broader architecture, giving Rocket Lab a place beyond SpaceX's initial program, which is far larger than its own.