Mergers for Spectrum: Rocket Lab (RKLB.US) targets Iridium Communications (IRDM.US) L-band, CEO says “Spectrum can't be conjured out of thin air”

According to Golden Ten Data, as Iridium Communications (IRDM.US) shareholders prepare to vote on Rocket Lab's (RKLB.US) proposed acquisition, Rocket Lab CEO Peter Beck stated that the deal would bring the rocket and satellite manufacturer a valuable asset that has attracted the attention of SpaceX and Amazon: spectrum.

RKLB shares rose 3% on Tuesday, closing at $71.98, marking a second consecutive day of gains.

Iridium's spectrum is critical for Rocket Lab

Beck said in an MTS interview: "The only thing you need to do communications is spectrum. Spectrum is a law of physics; you simply can't create spectrum out of thin air."

Beck cited SpaceX and Amazon's investments in spectrum to explain why Rocket Lab wants Iridium. The deal would add satellite communications services to a company that already manufactures spacecraft and launches rockets.

"Maybe I shouldn't have called it Rocket Lab to begin with—perhaps I should have called it Space Lab," Beck said. "Rockets always steal the spotlight." He noted that integrating launch, spacecraft, and services under one roof can reduce the cost and time needed to deploy a new network.

According to his "napkin math," Beck estimated Rocket Lab could have developed and deployed Iridium’s constellation for about $350 million, whereas he estimates Iridium spent about $3 billion. He also stated that such a project might take only 12 to 24 months, instead of more than five years.

Beck described Iridium’s L-band spectrum as "a truly loud voice" that can penetrate rain and buildings, making it extremely valuable for defense and mission-critical communications. He also mentioned the spectrum’s potential for alternative positioning services, saying its signal strength could be 1,000 times that of GPS and much harder to jam.

Iridium shareholders are scheduled to vote on the merger on Thursday. Rocket Lab has completed a $1.944 billion stock offering and has terminated a previous $3.6 billion bridge financing commitment, thereby securing the necessary cash for the proposed acquisition. The company expects the transaction to be completed by mid-2027.

The Space Force bet moves forward

The company is pursuing the same "build–launch–operate" integrated model in the national security sector. Rocket Lab said in a recent X (Twitter) post that it has completed program initiation for the "Space-Based Airborne Moving Target Indicator" (SB-AMTI) demonstration project for the U.S. Space Force. The company said it will deliver Flatellite spacecraft equipped with sensor technology to help the military track airborne threats.

Prior to this launch, the company announced last month that it had secured a $397 million contract from the Space Force. Rocket Lab is tasked with developing, launching, and operating multiple Flatellites, to be launched aboard its yet-to-fly Neutron rocket. The contract includes options for additional spacecraft purchases, but Rocket Lab has not yet disclosed the number of satellites or launch dates.

SpaceX separately won a $4.16 billion SB-AMTI contract in May. The Space Force has indicated plans to use multiple vendors in the broader architecture, which allows Rocket Lab to carve out a place beyond SpaceX’s much larger initial projects.