Carlsbad, Calif.-based Viasat completed its $6.1 billion acquisition of London-based Inmarsat on Wednesday, accelerating the company’s bid to become a global provider of satellite broadband for aircraft, ships, governments and homes. difficult to reach.
The combined company operates 19 communications satellites worldwide, with more in the pipeline. This compares to Viasat’s five-satellite fleet that focuses primarily on the Americas.
Together, the companies have 8,000 employees and estimated annual revenues of $4.1 billion. The deal should boost Viasat’s earnings immediately.
“Combining our companies brings together the people, technology, innovation, network assets, spectrum assets and global partnerships needed to help connect the world more affordably, securely and reliably,” said Mark Dankberg, CEO of Viasat.
The merger also strengthens Viasat to weather a wave of new competition in the space internet led by SpaceX’s Starlink fleet but also including Amazon, OneWeb and others.
These deep-pocketed new entrants are launching swarms of small satellites into orbit closer to Earth. They aim to deliver high speeds with minimal transmission lag, overcoming the financial and technical hurdles that have doomed previous attempts to operate Internet systems in low Earth orbit. Starlink said in a Twitter post that it now has 1.5 million customers worldwide, up from 250,000 in March 2022.
Viasat and Inmarsat are responding with powerful higher-orbiting satellites, including the terabit-class Viasat-3 fleet, which can dynamically direct bandwidth to where it’s needed most. The first of three Viasat-3 satellites was launched on April 30 from the Kennedy Space Center in Florida. Inmarsat launched a new I-6 broadband satellite in February and has five more planned by 2025.
Both Viasat and Inmarsat have a strong foundation in providing in-flight Wi-Fi to commercial airlines with customers including Delta, American, United, JetBlue and Southwest Airlines. Viasat also provides connectivity to government aircraft, including Air Force One.
Inmarsat also has deep roots in the shipping market and with governments around the world.
The deal, first announced in November 2021, has passed the final anti-monopoly regulatory review in the US and Europe over the past two weeks.
Viasat paid $551 million in cash and issued 46.36 million shares of common stock for Inmarsat. Viasat also took on $3.4 billion of Inmarsat debt.
Inmarsat shareholders now own approximately 37.6% of Viasat’s common stock. The cash portion of the purchase price was reduced from $850 million to $551 million after Inmarsat paid a $299 million special dividend to its shareholders in April 2022.
Viasat managed to freeze the financing in the autumn of 2021, when the deal was announced, thus benefiting from a better interest rate environment than today.
Viasat’s corporate headquarters will remain in Carlsbad. Its new global international corporate headquarters will be in London.
Dankberg will serve as CEO and president of the combined company, with Guru Gowrappan of Viasat continuing in the role of president.
“This combination expands the global fixed and mobile services available to customers at a defining time for the industry,” said Gowrappan.
Inmarsat Chief Executive Officer Rajeev Suri and Chairman Andy Sukawaty will join Viasat’s board of directors.
Viasat shares fell 2.6% on Wednesday to close at $44.61 on the Nasdaq.
2023 The San Diego Union-Tribune
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