Here's why Rocket Lab chose to go public via SPAC

Rocket Lab CEO Peter Beck joins "Squawk on the Street" to discuss taking the company public via SPAC and future space launches. For access to live and exclusive video from CNBC subscribe to CNBC PRO: https://cnb.cx/2NGeIvi

Rocket Lab, the leader among companies building small rockets to launch satellites, is going public through a SPAC merger that values the company at more than $4 billion when the deal closes.

The company is combining with Vector Acquisition, a special purpose acquisition company. Rocket Lab will list on the Nasdaq under the ticker RKLB when the deal closes, which is expected in the second quarter.

“This milestone accelerates Rocket Lab’s ability to unlock the full potential of space through our launch and spacecraft platforms and catalyzes our ambition to create a new multi-billion-dollar business vertical in space applications,” Rocket Lab CEO Peter Beck said in a news release.

Beck spoke to CNBC in depth about the company’s growth plans after it goes public.

Vector’s SPAC currently trades under the ticker VACQ. Shares of the SPAC climbed as much as 48% in trading on Monday from its previous close of $10.25 a share.

The SPAC deal values Rocket Lab at an enterprise valuation of $4.1 billion, with the company expecting to have about $750 million in cash after the merger is complete. That cash includes up to $320 million from Vector Acquisition, as well as a $470 million PIPE round led by Vector Capital, BlackRock and Neuberger Berman, among other investors.

PIPE, or private investment in public equity, funding allows private investors to buy public shares at below-market prices. A SPAC is a special purpose acquisition company in which investors give essentially a blank check to a company for the purpose of unspecified acquisitions of other firms.

Beck will continue to lead Rocket Lab as CEO, with Vector Capital’s chief investment officer Alex Slusky set to join the company’s board of directors – alongside Khosla Ventures’ Sven Strohband, Bessemer Venture Partners’ David Cowan, DCVC’s Matt Ocko, and independent director Mike Griffin.

Notably, Rocket Lab’s announcement comes on the same day as satellite data venture Spire Global revealed that it too will merge with a SPAC to go public. Both Rocket Lab and Spire Global count Bessemer as an investor, with partners Cowan and Tess Hatch on the companies’ respective boards.

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