Intuitive Machines announced that the company is going public through a reverse merger with a blank-check company or SPAC, Inflection Point Acquisition Corporation (NYSE: IPAX). The deal is expected to value the company at just over $1 billion.
The company will be listed on the Nasdaq under the name - Intuitive Machines, and the deal is expected to be completed in the first quarter of 2023. For both Inflection Point and Intuitive Machines, JPMorgan (NYSE: JPM) and Cantor Fitzgerald are serving as financial advisors and lead bankers.
After accounting for debt, the new company is expected to have an enterprise value of $815 million. Inflection Point had raised $300 million in its IPO last year during the SPAC boom with an intention to take a private European tech or consumer business public. The window was closing as SPACs have a limited time to deploy their raised capital, or it's returned to investors.
Intuitive Machines was founded in 2013 and is based in Houston, Texas. It's impressive that in such a short time, has become one of NASA's most reliable contractors. Intuitive Machines' lunar payload delivery services were chosen by NASA for 3 lunar missions which will send an American spacecraft to the surface of the Moon.
For most of 2022, the IPO, M&A, and SPAC markets have been nearly frozen due to the Federal Reserve's hawkish turn. A big factor is that nearly all of the IPOs and SPACs are down by a staggering amount from their debuts, turning off investors from the asset class. During the height of the SPAC craze, it wasn't unusual to see more than a 10:1 ratio between SPACs and IPOs. Now, many SPACs are being unwound and even the SPAC-king Chamath Palihapitiya has dissolved 2 of his vehicles.
However, this deal is a reflection that investors continue to be interested in and see opportunities in space, as many investors believe this is going to be the sector where the next batch of trillion-dollar companies emerge. Another factor is that there simply aren't many pure-play, space companies in the sector.