One thing I don't think the market is fully appreciating yet is the potential valuation impact of combining $Rocket Lab USA, Inc.(RKLB)$ with Iridium.
Iridium currently trades at a much lower revenue multiple than RKLB. In M&A, though, the combined company doesn't necessarily trade at a simple weighted-average multiple.
One reason companies with premium valuations pursue acquisitions is the potential for multiple arbitrage: applying a higher consolidated multiple to a larger revenue base.
Using simple numbers:
• RKLB standalone: ~33.6x NTM sales
• Iridium: ~5.2x (~8x using acquisition metrics)
• Combined NTM revenue: ~$2.15B
I wouldn't expect the combined company to maintain RKLB's full 33.6x multiple. But even at ~25x sales, the implied market cap would be roughly $54B. At 30x, it would approach $65B.
Dilution needs to be taken into account, but remains limited to 4-5% of RKLB's diluted shares outstanding (29 mil. shares issued).
That's the part I think investors may be underestimating.
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