[Satellite News 11-29-12] Rough estimates of merger and acquisition (M&A) activity show that more than $5 billion was moved in the satellite industry as a result of transactions that occurred in 2012 alone. Many satellite analysts expected a busy year for M&As, as industry firms insulated themselves from the leftover economic effects of the global recession and debt crisis and enhanced their position to attack new verticals. Few, however, expected that much money to be moved in the markets where these transactions took place. <\/p>\n
As the 2013 through 2016 era shapes up to be a technological transition for the satellite industry, many will look back at 2012 as the year that enabled several suppliers and operators to financially and technically realize their long-term plans. In this special two part feature, Satellite News breaks down 2012\u2019s M&As by impact in dollar amount and previews what to expect as a result. [Satellite News 11-29-12] Rough estimates of merger and acquisition (M&A) activity show that more than $5 billion was moved in the satellite industry as a result of transactions that occurred in 2012 alone. Many satellite analysts expected a busy year for M&As, as industry firms insulated themselves from the leftover economic effects of the global […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":"","_links_to":"","_links_to_target":""},"categories":[2],"tags":[],"class_list":["post-81968","post","type-post","status-publish","format-standard","hentry","category-news"],"acf":[],"_links":{"self":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/posts\/81968"}],"collection":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/comments?post=81968"}],"version-history":[{"count":0,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/posts\/81968\/revisions"}],"wp:attachment":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/media?parent=81968"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/categories?post=81968"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/tags?post=81968"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\n
\nDigitalGlobe Acquires GeoEye (July \u2013 $900 million)<\/strong>
\n When Earth-imaging provider DigitalGlobe <\/strong>announced that it agreed to acquire its former competitor GeoEye <\/strong>for approximately $900 million, GeoEye\u2019s principal shareholder Cerberus Capital Management also agreed to vote its shares in favor of the merger, making it almost certain to close and sealing the deal due to the absence of regulatory objections. The merged company kept the DigitalGlobe name and each GeoEye share was exchanged for either 1,137 shares of DigitalGlobe common stock and $4.10 in cash, $20.27 in cash or 1.425 shares of stock. The purchase consideration represented a 34 percent premium on GeoEye\u2019s July 20 closing price of $15.17 immediately before the merger announcement.
\n Interestingly, the merger announcement followed a warning of a critical reduction in the U.S. Earth imagery market and the failure GeoEye\u2019s unsolicited offer to acquire DigitalGlobe for a total value of $762 million \u2013 an offer that was backed by Cerberus and prompted by the U.S. Government\u2019s announcement of a planned retrenchment of the U.S. National Geospatial Intelligence Agency\u2019s (NGA) EnhancedView program. Via Satellite<\/em> Columnist Owen Kurtin noted that the offer was, \u201cdescribed as a Pac-Man bid\u201d, after the early video game, in which a smaller company attempts to avoid being acquired by a larger competitor by acquiring the competitor first.
\n DigitalGlobe rejected GeoEye\u2019s offer, and GeoEye\u2019s stock fell more than 20 percent to trade at a recent low of 8.4 times earnings, rendering it immediately vulnerable to DigitalGlobe\u2019s counter-offer two months later.
\n Revenue from the U.S. government should represent about half of the merged company\u2019s estimated 2012 revenues of $600 million. DigitalGlobe\u2019s pre-merger revenues were 63 percent attributable to government sales, meaning the merger dilutes the surviving company\u2019s dangerous dependence on the principal government customer. DigitalGlobe estimates that the merger will create efficiency savings of $1.5 billion through 10 years in large part from operating three Earth imaging satellites instead of the merging companies\u2019 combined fleet of five. The deal also put an end to the U.S.-based duopoly that served primarily the U.S. government and will create the world\u2019s largest commercial imagery provider.
\n
\nMDA Acquires Space Systems\/Loral (June \u2013 $875 Million)<\/strong>
\nCanadian provider of essential information solutions MacDonald, Dettwiler and Associates (MDA)<\/strong> signed an agreement to acquire satellite manufacturer Space Systems\/Loral (SS\/L)<\/strong> for $875 million in an immediately accretive transaction that transforms MDA into a significant commercial communications entity. The deal adds SS\/L \u2013 a top global provider of commercial communications satellites \u2013 to MDA\u2019s portfolio and provides the company with critical mass in the U.S. market.
\n Following the acquisition, MDA said it would have combined annual revenues of $1.9 billion as of the 2011 calendar year and a combined backlog of $2.8 billion as of March 31, 2012. SS\/L will retain its brand name and management team. The acquisition was financed by a combination of cash on hand, a three-year promissory note of $101 million, a new twelve-year senior secured note of $250 million with two major U.S. financial institutions, an existing senior secured note of $100 million, and approximately $600 million of variable rate term and revolving loans under a new four-year $850 million senior secured syndicated credit facility.
\n MDA President and CEO Daniel Friedmann said the acquisition was a, \u201cgame changing transaction for the company. With one move, we are bringing together two market leaders to create a unique global communications and information company with a strong commercial focus. Post-acquisition, more than two-thirds of MDA\u2019s total revenues will come from the commercial market.\u201d
\n SS\/L has a U.S.-based workforce of 3,200 employees, and more than one million square feet of facilities. According to Futron<\/strong>\u2019s Satellite Orders Report, SS\/L has been awarded more commercial satellite contracts worldwide than any other company since 2005. Its full-year revenues for 2011 were $1.1 billion, with pro-forma operating EBITDA of $153 million.
\n The U.S. Department of Justice made inquiries into the nature of the deal this past fall, but the acquisition was allowed to proceed and closed in early November.
\n
\nCobham Acquires Thrane & Thrane (May \u2013 $445 million)<\/strong>
\n British defense equipment manufacturer Cobham <\/strong>secured a recommended 275 million British pound ($445 million) takeover bid for Danish satellite telecommunications manufacturer Thrane & Thrane<\/strong>. The combined company is now operated from Thrane & Thrane\u2019s current site in Denmark.
\n Cobham had been trying to merge with Thrane & Thrane since spring 2011, which culminated with a 270 million British pound ($437 million) bid placed in March after building up a 25.6 percent stake in Thrane\u2019s business.
\n Cobham Executive Chairman John Devaney said he was pleased that by increasing its offer to take account of the dividend for the 2011 year that ended, Cobham secured a recommendation that would allow it to move quickly, and with certainty in integrated Thrane & Thrane into the Cobham group.
\n Cobham initially submitted an offer to acquire Thrane & Thrane for 420 Danish crowns, or $73.78 per share, in February, but withdrew the offer in March after Thrane & Thrane\u2019s board of directors failed to recommend the proposal. Thrane shareholders were not pleased by the board\u2019s actions, which led to the resignation of Thrane Chairman Waldemar Schmidt in March.
\n A little more than a week later, Cobham announced April 5 that it had purchased a combined 22.74 percent of Thrane\u2019s equity from Jupiter Asset Management<\/strong> and other shareholders.
\n Cobham\u2019s satellite telecommunications businesses focuses on mobile communications terminals and generates most of its $160 million average per-year profit from its SeaTel, TracStar <\/strong>and Omnipless <\/strong>businesses. In 2011, MSS operator Inmarsat named Cobham its initial maritime partner for its $1.2 billion investment in Global Xpress Ka-band satellite network, which aims to provide a broadband component to Inmarsat\u2019s L-band mobile satellite communications business. Thrane & Thrane also has significant business with Inmarsat, as the company recently delivered 600 Explorer 325 vehicular BGAN terminals with push-to-talk units and associated server infrastructure to Elektro Brazil on March 15.
\n Analysts project that the Cobham acquisition of Thrane & Thrane could more than double Cobham\u2019s satellite telecommunications business and yield more than 2 million pounds ($3.16 million) in annual pre-tax savings by eliminating redundancies in the two companies\u2019 engineering, production and distribution operations. Cobham management said the combined company would reap 4 million British pounds ($6.5 million) in savings per year.
\n <\/p>\n","protected":false},"excerpt":{"rendered":"