Rocket Lab announced on March 11 its plans to acquire Mynaric, its optical communications terminal supplier. The deal, valued at $150 million, is dependent on Mynaric’s completion of its restructuring process, which will see its shares transferred to a lender connected to PIMCO. The acquisition will give Rocket Lab a significant presence in Europe and further its vertical integration strategy.
The initial purchase price of $75 million (payable in cash or shares), with an additional $75 million contingent on revenue milestones, represents a small portion of the over $300 million previously invested in Mynaric. This acquisition provides Rocket Lab with “extensive production assets, Intellectual Property, product inventory and committed backlog related to satellite-to-satellite optical connectivity solutions for next generation constellations,” the company stated. This acquisition complements Rocket Lab's existing portfolio of satellite components.
Optical terminals are crucial for high-bandwidth data transmission between satellites, a key technology for mesh networks like the one the U.S. Space Development Agency (SDA) is developing. Mynaric acts as a subcontractor to Rocket Lab under its $515 million contract with SDA for 18 Tranche 2 Transport Layer-Beta satellites. They also supply terminals to other companies working on SDA contracts, including Northrop Grumman and York Space.
Mynaric's restructuring stemmed from production delays and higher-than-anticipated costs for its CONDOR Mk3 terminal. “The Company remains in pre-profit state and despite cash-in from customers as milestones were achieved, earnings have recently not been sufficient to achieve a sustainable positive operating result that is able to service the debt burden,” Mynaric explained on February 7. Despite challenges, demand for optical communications remains strong, as highlighted at the Satellite Conference on March 10. However, acquiring laser communication systems continues to be difficult for satellite manufacturers due to limited supply and high costs.
Rocket Lab aims to leverage its acquisition expertise to scale Mynaric's production, addressing the growing demand for optical terminals from large constellations and a widening customer base. Through previous acquisitions, Rocket Lab has successfully increased production of previously limited satellite subsystems, and it intends to replicate this success with Mynaric.