Acquisition will Enhance Market Position in Government, Maritime and Enterprise Sectors
to Acquire Globecomm
London, Aug 28, 2018 AEST (ABN Newswire) - Speedcast International Limited (
ASX:SDA) (SPPDF:OTCMKTS) ("Speedcast"), the world's most trusted provider of remote communication and IT solutions, today announced it has entered into a definitive agreement to acquire Globecomm Systems Inc. ("Globecomm") from affiliates of HPS Investment Partners, LLC Tennenbaum Capital Partners, LLC and certain other members of Globecomm for an estimated net purchase consideration of US$135 million, including expected purchase price adjustments.
Globecomm is a leading provider of remote communications and multi-network infrastructure to Government, Maritime, and Enterprise sectors in over 100 countries. The acquisition strengthens Speedcast's global competitive position in these sectors by enhancing its current solutions, and complements the recent acquisition of UltiSat - doubling Speedcast's revenue in the Government sector, and adding more scale, visibility and capabilities in this growth market. In addition, Globecomm will benefit from Speedcast's scale and capabilities in the Maritime and Enterprise markets.
"This acquisition of Globecomm is fully in line with our strategy to consolidate our industry and thus build competitive advantages based on scale and capabilities. Globecomm is particularly complementary to UltiSat as it strengthens Speedcast's position serving Government customers at a time when government spending globally is expected to rise. Globecomm has built a strong reputation providing remote communications and professional services to key customers in the Government sector, as well as in the Maritime and Enterprise segments," said Speedcast CEO Pierre-Jean Beylier. "I am excited to have the Globecomm team joining Speedcast. They will strengthen our innovation capabilities with new solutions and strong engineering experience, as well as enhancing our system integration propositions. We expect to drive significant cost and revenue synergy potential from this acquisition, given the strong financial and operational benefits of scale across core verticals."
"The Globecomm team is thrilled to join forces with the global leader in remote communications. This is an exciting development for our employees and our customers and I look forward to building new solutions and further enhancing our customers' experience with the integrated team," said Jason D. Juranek, CEO Globecomm.
Speedcast estimates it will generate over US$15 million in annual cost synergies within 18 months after the acquisition. The cost synergies are expected to be generated across the business, including through footprint rationalisation, network improvements and improved procurement.
The acquisition will be funded by a fully underwritten US$175 million add-on to Speedcast's existing 7-year senior secured credit facility (due 2025) from the US institutional term loan market, which will also be used to repay a portion of Speedcast's revolving credit facility and thus enhance Speedcast's liquidity position.
The transaction is expected to close in Q4 2018, subject to the completion of customary closing conditions, including regulatory approvals.
J.P. Morgan and Jefferies acted as Financial Advisors to Speedcast. Goodwin acted as Legal Advisors to Speedcast.
Kirkland and Ellis LLP acted as Legal Advisors to Globecomm.
For more information about Speedcast, please visit http://www.speedcast.com
About Speedcast International Ltd
Speedcast International Ltd (ASX:SDA) is the world's most trusted communications and IT services provider, delivering critical communications solutions to the Maritime, Energy, Mining, Media, Telecom, Cruise, NGO, Government, and Enterprise sectors. With more satellite capacity than any other provider, Speedcast enables faster, seamless pole-to-pole coverage from a global hybrid satellite, fiber, cellular, microwave, MPLS, and IP transport network with direct access to public cloud platforms. The company also integrates differentiated technology offerings that provide smarter ways to communicate and distribute content, manage network and remote operations, protect and secure investments, and improve the crew and guest experience. With a passionate customer focus and a strong safety culture, Speedcast serves more than 3,200 customers in over 140 countries. Learn more at www.speedcast.com.
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