Space launch provider Rocket Lab to buy satellite operator Iridium for $8B

Rocket Lab Corp. today announced plans to acquire Iridium Communications Inc., a major satellite operator, for $8 billion in cash and stock.

The companies expect to complete the transaction in mid-2027.

Rocket Lab is the developer of Electron, a 60-foot launch vehicle optimized to take satellites into low Earth orbit, or LEO. The company completed its first successful flight in 2019. It has since deployed more than 250 satellites for customers aboard 91 Electron rockets.

Besides providing launch services, Rocket Lab also supplies components to other space companies. The company makes solar arrays, propulsion modules, sensors and a variety of other subsystems. Furthermore, Rocket Labs offers a suite of software tools that companies can use to coordinate their spacecraft. 

Iridium focuses on a narrower segment of the space market. It operates an internet constellation that comprises 66 active LEO satellites and more than a dozen spares. The company uses the network to deliver connectivity in far-flung areas with limited access to terrestrial internet infrastructure. 

Iridium provides access to its constellation through multiple services. One, Iridium PTT, is optimized for first responders. Another is geared toward connected devices that require the ability to occasionally broadcast their location and maintenance status. Iridium also offers a service called NTN Direct that enables users to connect to its satellites without a standalone antenna dish.

The company offers its connectivity subscriptions alongside a so-called PNT service. It’s an alternative to GPS that can withstand harsh weather, interference and other adverse conditions. The service also works in indoor environments, where devices usually struggle to pick up GPS signals. 

Iridium’s satellite constellation supports 2.55 million active subscribers. The company generated $871.7 million in revenue from those customers last year, 5% more than in 2024.

Rocket Lab plans to grow Iridium’s addressable market after the acquisition. In particular, the company stated that it hopes to “scale into untapped markets and pioneer new space-based services.” That hints the initiative could see Rocket Labs expand Iridium’s constellation. 

The company is no stranger to the satellite market. It sells a satellite chassis called Lightning that is optimized for LEO, the stretch of space where Iridium’s constellation is deployed. The module includes radiation hardening, redundant systems and other reliability optimizations.

Rocket Lab plans to take Lightning-based satellites to orbit aboard an upcoming launch vehicle called Neutron. The rocket can carry 28,000 pounds, more than 20 times the cargo capacity of Electron, thanks to nine custom engines. Its first phase is reusable, which should enable Rocket Labs to reduce the cost of satellite launches and thereby boost Iridium’s margins.  

Image: Iridium