Rocket Lab agreed to buy satellite operator Iridium in a cash-and-stock deal. Both stocks rose as investors bet on combined launch-and-comms capabilities.

The Deal

Rocket Lab USA Inc has agreed to acquire Iridium Communications in a transaction pairing a launch-and-spacecraft manufacturer with a global satellite communications operator. Iridium shareholders will receive $27 in cash plus Rocket Lab stock, valuing the offer at roughly $54 per Iridium share. The deal is expected to close mid-2027, pending regulatory approval and Iridium shareholder consent.

What Iridium Brings

Iridium generated $871 million in revenue for fiscal 2025 with a 57% OEBITDA margin. It operates 66 satellites with 14 on-orbit spares and serves over 2.5 million subscribers globally. That's established infrastructure and an active customer base—the kind of assets that typically attract major acquirers.

The Financing

Rocket Lab secured a $3.6 billion bridge loan commitment from Deutsche Bank and Wells Fargo, covering a meaningful portion of the deal cost.

Market Narrative

The consolidation play centers on vertical integration: combining Rocket Lab's launch and spacecraft manufacturing with Iridium's satellite communications operations. Investors are betting the combined entity will capture value from that integration. Execution and timing will determine whether that thesis holds.