Social Capital Hedosophia to merge with Virgin Galactic, merger valued at $1.5B
Virgin Galactic, or VG, and Social Capital Hedosophia, or SCH, a public investment vehicle sponsored by Social Capital and Hedosophia, announced that the boards of directors of each company have approved a definitive agreement under which VG and SCH will merge, with the current shareholders of SCH expected to own up to approximately 49% of the combined company. Upon closing of the transaction, which is expected in the second half of 2019, VG will be introduced as the first and only publicly traded commercial human spaceflight company. Virgin Galactic has developed a set of technologies designed to enable a safe and familiar flying experience for customers to go into space and become officially designated astronauts. Virgin Galactic's technologies have created the first vehicle built for commercial service to put humans into space. Virgin Galactic already has customer reservations from more than 600 people in 60 countries representing approximately $80M in total collected deposits and $120M of potential revenue. Virgin Galactic has already been granted its FAA commercial space launch license, and the New Mexico Spaceport has also received its Spaceport license. Pro forma enterprise value of the merger is $1.5B. Social Capital Hedosophia Founder and CEO, Chamath Palihapitiya, will invest an additional $100M in the transaction and will become chairman of the combined entity. As part of its commercial operations, VG has exclusive access to the principal assets at Spaceport America, New Mexico. Spaceport America is the world's first, purpose built commercial spaceport. As announced on May 10, VG is moving more than 100 spaceline staff and its space vehicles to Spaceport America, which will become the new location of its operational headquarters. Spaceport America will be the site of VG's initial commercial spaceflights and where the company will deliver a customer experience over the multi-day pre-flight period. As part of this transaction, the existing management team of VG will remain in place following the close of the transaction with George Whitesides remaining as CEO, while a new board, comprised of seven directors, will be augmented by the addition of Chamath Palihapitiya, as chairman and Adam Bain.