Credit: Dreamstime
Speedcast International has entered into an agreement to acquire US-based remote communications and multi-network infrastructure provider for US$135 million.
The Australian-listed satellite telecommunications service provider told shareholders on 28 August the acquisition is set to strengthen Speedcast's global competitive position in government, maritime and enterprise sectors.
Speedcast will acquire the business from affiliates of HPS Investment Partners, LLC Tennenbaum Capital Partners, LLC and certain other members of Globecomm.
Globecomm Systems is present in 100 countries, and estimates US$15 million in annual cost synergies within 18 months after the acquisition.
“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," Speedcast CEO Pierre-Jean Beylier said.
"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.
"They will strengthen our innovation capabilities with new solutions and strong engineering experience, as well as enhancing our system integration propositions."
Specifically, the acquisition will be funded by a fully underwritten US$175 million add-onto Speedcast’s existing seven‐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 the fourth quarter of 2018, subject to the completion of customary closing conditions, including regulatory approvals.
