In an announcement today, US-based Viasat has revealed its intentions to buy UK-based satellite communications company Inmarsat in a deal worth $7.3 billion. The deal, yet to be passed by shareholders and regulators, is expected to close in mid-2022. If it goes through, it would see the creation of one of the world’s most powerful space-based broadband companies.
Viasat set to buy Inmarsat
United States-based Viasat has today announced that it intends to buy UK company Inmarsat, in a move that will create one of the biggest space-based broadband companies in the world. The deal is worth $7.3 billion in cash, and is the first major consolidation seen in this market to date.
Viasat’s Executive Chairman Mark Dankberg commented on the deal, saying,
“This is a transformative combination that advances our common ambitions to connect the world. The unique fusion of teams, technologies and resources provides the ingredients and scale needed for profitable growth through the creation and delivery of innovative broadband and IoT services in new and existing fast-growing segments and geographies,”
“Inmarsat’s dual-band global mobile network, unique L-band resources, skills and capabilities in the U.K. and excellent technical and operational talent worldwide, are powerful complements to Viasat’s business. Together, we can advance broadband communications and create new hybrid space and terrestrial networks that drive greater performance, coverage, speed, reliability and value for customers. We look forward to welcoming the Inmarsat team into the Viasat family.”
The valuation of the deal is a result of combined transactional elements including $850.0 million in cash, approximately 46.36 million shares of Viasat common stock valued at $3.1 billion, and the assumption of $3.4 billion of net debt. The transaction is, of course, subject to the approval of Viasat stockholders as well as regulatory bodies, and is expected to close in the second half of 2022.
What will the combined company look like?
Inmarsat has built itself into a global brand, and has a strong focus on the mobility sector, particularly aviation. Global Xpress (GX) is widely considered to be one of the best networks for inflight connectivity and was set to be augmented with the addition of two highly elliptical orbit (HEO) satellites to provide coverage over the polar regions.
But Viasat is no small competitor either. Its own robust network has been popular with airlines too, with JetBlue opting for the Ka-band solution for its A220s and A321LRs. The firm even tempted Delta Air Lines away from its Gogo-exclusive provision, as it pushes towards a free WiFi future.
As detailed in the announcement, the combined company will boast:
- 19 in service satellites, with a further 10 planned for launch in the next three years alone
- A board portfolio of spectrum licenses covering the Ka, L, and S-bands
- Ka-band coverage across the world, including within the Polar regions with the launch of the planned HEO satellites
- A powerful combination of Viasat’s beamforming technologies and Inmarsat’s L-band spectrum and space assets
It goes without saying, that together these companies will form a powerful multi-spectrum, multi-orbit conglomeration. With manufacturing and personnel capacity on both sides of the Atlantic, the firms could become a dominant force in connectivity for the future. Rajeev Suri, CEO of Inmarsat, described the benefits to the UK company, saying,
“Joining with Viasat is the right combination for Inmarsat at the right time. 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 U.K. has a strong and sustainable presence in the critical space sector for the long term.”
Viasat has stated that it intends to maintain and even grow the UK presence of the newly combined business, which should give some reassurance to the London-based team. However, a consolidation of this size will surely draw attention from competition authorities, and there will inevitably be some hoops to jump through before this deal is finalized.
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