I may have mentioned once or twice that Google is never one to be lagging in state of the art tech. The search engine giant is apparently in talks with Virgin Galactic to strike up a deal, which will give to Google critical access to satellite-launch technology and also a tidy equity stake in the space tourism project.
According to Sky News, the discussions with Virgin Galactic are part of Google’s project to put satellites in low-Earth orbit in an attempt to expand Internet access globally. The negotiations between the two firms have been taking place for a long period of time and are said to be well along.
Google will inject hundreds of millions of dollars into the joint venture; with Virgin Galactic providing the technology it has developed as part of the effort to construct the first space tourism business on earth. Next, Google will spend roughly $30m (£17.8m) in return for a small stake in Virgin Galactic’s holding company. Obviously as the deal has yet to be finalised, the terms may yet be altered. A source close to Google said, that it’s £17.8m investment could value Virgin Galactic around £1.2bn, thereby equating to a shareholding of 1.5%.
This deal could be valuable for Virgin Galactic’s reputation, which has taken a knock or two in recent times, as there have been suggestions that problems with its development will restrain its feasibility. Branson’s company has insisted that flights ought to begin in 2014, although there is no firm date set.
This news comes on the heels of Google’s announcement that it will be buying Skybox Imaging, a start-up satellite venture, for $500m (£297m). Google is also currently engaged in a race with competitors to extend Internet access people who do not currently have it, by using balloons, known as project Loon.
Virgin Galactic is approximately 1/3 owned by Aabar Investments, an Abu Dhabi-based group. The group paid about $280m(£166m) for a 32% stake in the venture’s holding firm. It was that deal which valued Virgin Galactic at approximately $900m(£535m). This means if the transaction with Google is completed, the company’s equity value has more than doubled in the last 5 years.
Apparently Google and Virgin Galactic have both declined to comment on the deal.
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[Image via toffsworld]