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    Inmarsat sold to ViaSat for $7.3bn

    US-based satellite operator ViaSat has announced a $7.3 billion deal to acquire Inmarsat, combining the two firms’ resources to create a communications powerhouse operating assets in multiple frequency bands for customers in various industry verticals.

    The move comes less than three years after Inmarsat’s board agreed a $3.4 billion deal to take the company private, advising shareholders to accept the bid from a private equity consortium led by Apax Partners and remove the company from public trading on the London Stock Exchange. That takeover was completed in January 2020.

    The $7.3 billion ViaSat deal is comprised of $850 million in cash, approximately 46.36 million shares of Viasat common stock valued at $3.1 billion (based on the closing price on Friday November 5, 2021), and the assumption of $3.4 billion of net debt. Inmarsat’s current owners will consequently own shares representing an aggregate of 37.5% of Viasat stock following the transaction.

    The combined company intends to integrate the spectrum, satellite and terrestrial assets of both operators into a global high-capacity hybrid space and terrestrial network, incorporating the most favourable characteristics of multi-band, multi-orbit satellites and terrestrial air-to-ground systems to deliver more bandwidth at high demand locations (like shipping ports) than either company could provide alone.

    This includes a portfolio of spectrum licenses across the Ka-, L- and S-bands and a fleet of 19 satellites in service, with an additional 10 spacecraft under construction and planned for launch within the next three years.

    Inmarsat already offers a global Ka-band footprint with Global Xpress, including planned polar coverage, augmented by L-band services like FleetBroadband for resilience and reliability. ViaSat already has its own Ka-band ViaSat-1, ViaSat-2 and KA-SAT satellites in operation, and has announced plans for a new high-capacity Ka-band geostationary satellite fleet with ViaSat-3.

    ViaSat-3 will feature three satellites designed to provide capacity of at least 1 Terabit per second (Tbps), for end-user bandwidth speeds of 100+Mbps. The first ViaSat-3 launch is expected in early 2022.

    “Joining with Viasat is the right combination for Inmarsat at the right time,” said Rajeev Suri, CEO of Inmarsat.

    “Viasat is a terrific innovator and Inmarsat brings some powerful additions: global reach, a broad distribution channel, robust business momentum and a presence in highly attractive global mobility segments. Together, the two companies will create a new global player with the scale and scope to help shape the future of a dynamic and growing industry.”

    “The combination will create a strong future for Inmarsat and be well-positioned to offer greater choice for customers around the world, enhanced scope for partners and new opportunities for employees. The industrial logic is compelling and ensures that the UK has a strong and sustainable presence in the critical space sector for the long term.”

    The transaction has been unanimously approved by the boards of directors of both Viasat and Inmarsat, with The Baupost Group, Viasat’s largest shareholder, also agreeing to vote in favour of the takeover.

    Once the deal is done, Viasat intends to expand its board of directors from eight to ten members, with Andrew Sukawaty, current Chairman of Inmarsat, being appointed as one of the two new board members. A second new board member will be appointed at transaction closing by the current Inmarsat shareholders.

    Decisions regarding management of the combined company following the closing of the transaction will be made as part of the integration planning process, ViaSat said. The transaction is expected to close in the second half of calendar year 2022, subject to all necessary approvals.

    Article author: Rob O'Dwyer
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