(Bloomberg) -- AST & Science, which is developing a space-based cellular broadband network, is going public through a merger with a blank-check company.
AST is merging with New Providence Acquisition Corp., a special purpose acquisition company, or SPAC, according to a statement Wednesday. The combined company will be valued at $1.4 billion including debt. The deal is expected to close soon as the first quarter of 2021.
AST, also known as AST SpaceMobile, and New Providence have raised $232 million from a private placement to finance the transaction, the statement shows. The placement was led by AST's strategic partners, including Vodafone Group Plc, Japanese online retailer Rakuten Inc., American Tower Corp. and UBS Group AG's hedge fund arm UBS O'Connor. Bloomberg News earlier reported details of the deal.
“Universal broadband access has become a global necessity, and we are uniquely positioned to leverage our innovative technology solution and efficient business model to democratize broadband cellular access across the globe,” said Abel Avellan, chairman and chief executive officer of AST SpaceMobile.
AST, based in Midland, Texas, plans to provide broadband service from space to mobile phones, according to its website. It also announced plans Wednesday to partner with Vodafone to launch its commercial mobile communications service in 2023, providing for a 4G network.
New Providence raised $230 million in an initial public offering last year. Its shares, which priced at $10 apiece, climbed as high as $13 in early trading Wednesday.
“AST SpaceMobile represents a unique opportunity to invest in a pioneering company with revolutionary technology, access to a built-in customer base, and a flexible and scalable business model that addresses one of the largest challenges to global connectivity,” said Alex Coleman, chairman of New Providence.
Barclays Plc was the financial adviser to AST, and with Deutsche Bank AG also acted as placement agents to New Providence on the private placement.
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