Intuitive Machines, LLC (“Intuitive Machines” or the “Company”), a space exploration, infrastructure, and services company founded in 2013, and Inflection Point Acquisition Corp. (“Inflection Point”), a special purpose acquisition company, have signed a definitive business combination agreement that will result in Intuitive Machines becoming publicly listed. Upon the closing of the transaction, the combined company will be named Intuitive Machines Inc., and its securities will be listed on Nasdaq.
“As the United States plans its return to the Moon after a 50-year absence, Intuitive Machines is excited to play a critical role in providing technologies and services to establish long-term lunar infrastructure and commerce,” said Kam Ghaffarian, Ph. D., Co-Founder and Executive Chairman of Intuitive Machines. “What’s different this time is that the U.S. government has astutely chosen to
utilize partnerships with the private sector to accomplish its goals more quickly and more cost-effectively,” he said.
“The objective is to create a thriving commercial ecosystem for space for the benefit of civilization,” said Dr. Ghaffarian. “This has created a massive secular growth opportunity for space as an industry. We have already seen companies such as SpaceX seize this moment and achieve fantastic results, and we are all still in the very early days of this new phase of space exploration, with tremendous growth potential ahead.”
Intuitive Machines is developing advanced space technologies including pro-pulsion systems, lunar mobility vehicles, power plants, and human systems. The Company’s technical capabilities support four distinct business units:
(I) Lunar Access Services, which will utilize the Company’s proprietary lunar
lander to fly scientific, commercial and infrastructure equipment and systems
to the lunar surface for both government and commercial clients.
(II) Lunar Data Services, which will leverage its six strategically positioned
ground stations across Earth and a planned lunar constellation to facilitate the
provision of secure lunar communications, navigation and imagery.
(III) Orbital Services, which will operate missions and develop technologies
enabling space logistics including satellite rideshare, repositioning, refueling
and orbital debris removal
(IV) Space Products and Infrastructure, which will develop and provide
propulsion systems, navigation systems, specialty engineering services, lunar
mobility, power infrastructure (Fission Surface Power) and human systems.
The U.S. government is heavily committed to space – the NASA budget for 2022 is $24 billion and the U.S. Space Force saw a 26% year over year increase in its projected 2023 budget to $24.5 billion. The accessible Total Addressable Market
(TAM) for Intuitive Machines is approximately $120 billion over the next decade,
with approximately $105 billion in lunar services (2021-2030), according to the
2022 Moon Markets Analysis by Northern Sky Research (NSR), and approximate-
ly $14 billion in Earth orbital services (2022-2031), according to NSR’s IoSM reports
in 2021 and 2022.
“We are in a leading position in the development of lunar space, to be for the
Moon what steamships, toll roads and rail companies were to Earth economies,”
said Steve Altemus, Co-Founder, President, and Chief Executive Officer of Intui-
tive Machines. “Each successive mission will allow us to extend our advantage
as we deliver satellites to lunar orbit, deliver systems to the lunar surface and
collect critical scientific and engineering data. We expect this will create an in-
credibly strong competitive position for the Company in just a few years and be
a foundation of U.S. space exploration, a national asset.”
The Company forecasts annual revenue of $102 million for 2022 rising to $291
million for 2023, underpinned by a material contract backlog of $188 million as
of September 2022, the majority of which is with the federal government.
“We are building on a nearly 10-year operating history, a solid foundation of con-
tracted business, a highly capital efficient model and fiscal discipline, hallmarks
we intend to continue,” said Erik Sallee, CFO of Intuitive Machines. “We believe
we are positioning ourselves to continue to aggressively grow our already sig-
nificant book of contracted business by going where the customers are today
to deploy our high reliability space systems and expand our product offerings
to the commercial market. As we increase our commercial business mix over
time and provide more services based offerings, we see a clear path to industry
leading margins within a three year time horizon. ”
The combined company has secured $55 million of committed capital from
entities affiliated with Inflection Point’s sponsor and from a founder of Intuitive
Machines, in addition to a $50 million equity facility provided by CF Principal
Investments LLC, an affiliate of Cantor Fitzgerald & Co., which the Company
expects will fund the business plan to profitability over the next 2-3 years.
“We are proud to be partnering with Intuitive Machines at a pivotal point in the
Company’s history,” said Michael Blitzer, Co-CEO of Inflection Point. “This
transaction will provide the capital to execute on the rapidly growing demand
for the Company’s proprietary technologies and services with key government
and commercial customers.”
“The history of commercial technological innovation is that great companies
dominate their markets and then extend into and lead new ones,” said Guy
Shanon, Co-CEO of Inflection Point. “This is what Intuitive Machines is doing,” he
explained. “The Company already has a sizable opportunity just from
government contracting activity. We believe the upside from what is to come as
the Moon becomes more traveled and better understood as a strategic defense
asset and a basecamp for exploring the rest of the solar system is a generational
opportunity.”
Transaction Overview
Pursuant to the transaction, Inflection Point, which currently holds
approximately $330 million of cash in trust, including $29 million of committed
capital from an affiliate of its sponsor, will combine with Intuitive Machines. The
pro forma implied enterprise value of the combined company is approximately
$815 million. Intuitive Machines’ existing equity security holders are expected
to hold approximately 62% of the issued and outstanding shares of common
stock of the combined company immediately following the consummation of
the transaction, assuming no redemptions by Inflection Point’s existing
shareholders.
The board of directors of Inflection Point and the board of managers of Intuitive
Machines have both unanimously approved the proposed transaction.
Completion of the proposed transaction is subject to customary closing
conditions, including the approval of the shareholders of Inflection Point and
the members of Intuitive Machines and the receipt of certain governmental and
regulatory approvals, and is expected to be completed in the first quarter of
2023.
For a summary of the material terms of the transaction, as well as a copy of
the business combination agreement and supplemental investor presentation,
please see the Current Report on Form 8-K to be filed by Inflection Point with
the SEC available at www.sec.gov and on Intuitive Machines’ website www.
intuitivemachines.com/investors. Additional information about the proposed
transaction will be described in the registration statement relating to the
transaction, which Inflection Point will file with the SEC
Advisors
J.P. Morgan Securities LLC is serving as the exclusive financial advisor to Intuitive
Machines. Cantor Fitzgerald & Co. is serving as exclusive financial advisor and
capital markets advisor to Inflection Point. Cantor Fitzgerald & Co. is also serving
as exclusive placement agent for the PIPE financing.
Latham & Watkins LLP is serving as legal advisor to Intuitive Machines, and
White & Case LLP is serving as legal advisor to Inflection Point. DLA Piper LLP
(US) is serving as legal counsel to Cantor Fitzgerald & Co.
