Rocket Lab (RKLB) Announces Big Acquisition Plan to Acquire Mynaric, and It’s a Bargain

Rocket Lab USA RKLB -1.55% ▼ is just a great name for a band in the 80s, but we’re talking about one of the key players in the space industry. It is best known for its Electron rocket and frequent satellite launches. However, the company aims for much more; it plans to control the entire space ecosystem, from manufacturing satellites to managing advanced space-based communications. To achieve this ambitious goal, Rocket Lab is acquiring Mynaric MYNAY +52.62% ▲ , a German company specializing in laser-based satellite communication.

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Reasons to Get Excited

Mynaric’s laser optical communication technology enables high-speed, secure satellite-to-satellite data transmission, an increasingly crucial capability for commercial and government applications. By bringing this technology in-house, Rocket Lab can enhance its satellite offerings and strengthen its position in national security and defense contracts.

Beyond technology, the deal also makes financial sense. Mynaric has faced production delays and financial struggles, allowing Rocket Lab to acquire it for just $75 million, far less than the $300 million previously invested in the company. If Mynaric meets certain revenue targets, an additional $75 million may be paid, but Rocket Lab is getting a bargain even at full price. The acquisition also establishes Rocket Lab’s first European base in Munich, expanding its presence beyond the U.S.

The move presents clear benefits, including stronger government partnerships, increased satellite capabilities, and an expanded customer base. In fact, Mynaric already supplies components for some of Rocket Lab’s government contracts, making this a logical integration. The deal could also help Rocket Lab compete with aerospace giants by offering a more comprehensive, vertically integrated service.

What Are the Risks?

It must also be stressed that the planned acquisition comes with risks. Mynaric’s financial instability and past production issues mean Rocket Lab will need to invest time and resources to stabilize operations. Merging the two companies without disruptions will be a challenge, and the competition in space communications is fierce, with SpaceX, Amazon’s AMZN -1.04% ▼ Kuiper project, and other players investing heavily in similar technology. Despite these risks, Rocket Lab’s strategy is clear.

By acquiring Mynaric, Rocket Lab is betting on the future of space-based laser communications and positioning itself as a full-service space company. If it successfully integrates Mynaric and scales its technology, this move could significantly strengthen its market position. Like anything else, only time will tell if this potential acquisition positions Rocket Lab alongside the biggest players.

What Is the Price Target for RKLB?

Turning to Wall Street, Rocket Lab USA is considered a Moderate Buy based on 13 ratings. The average price target for RKLB stock is $26.86, implying a 42.80% upside potential.

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