29 Mar 19. Success of Thales offer for Gemalto shares. Upon expiration of the Acceptance Period at 17:40 (CET) yesterday, approximately 85.58% of the Gemalto shares have been tendered to the Offer. As a result, all Offer Conditions described in the Offer Document have now been satisfied or waived. Thales and Gemalto are therefore pleased to announce that Thales declares the Offer unconditional (doet gestand).
- 85.58% of Gemalto shares have been tendered to the Offer
- All Offer Conditions are now satisfied or waived, making the Offer unconditional
- Settlement of tendered Shares will take place on 2 April 2019
- Remaining Shares can be tendered during the Post-Closing Acceptance Period which will start on Monday 1 April 2019 and end on Monday 15 April 2019
Gemalto will be consolidated as of 1 April 2019 in Thales’s financial statements.
28 Mar 19. Scisys set for another bumper year. Scisys (SSY:160p), a supplier of bespoke software systems to the media, space, defence and commercial sectors, has more than delivered on the expectations I outlined when I suggested buying the shares, at 102p, less than 18 months ago (‘Tune into a media play’, 11 October 2017).
Reflecting a raft of contract wins across all three segments of the business, the company’s annual underlying operating profit increased by 16 per cent to £5.1m on revenues up 10 per cent to £58.4m. Moreover, a net operating cash inflow of £5.4m in 2018 enabled Scisys to slash borrowings by almost half to £3.1m and cut the interest bill by 30 per cent to £0.5m, so more of the profit is being retained by shareholders. This helps explain why fully-diluted adjusted earnings per share (EPS) increased by almost 40 per cent to 12.8p, an outcome that enabled the board to hike the dividend per share from 2.16p to 2.38p, thus maintaining a dividend policy that has seen the payout hiked by at least 10 per cent a year since 2013.
Analysts at house broker finnCap expect a payout of 2.6p this year based on a 9 per cent rise in EPS of 14p and Scisys delivering operating profit of £5.5m on revenues of £62m. On this basis, the shares are rated on a forward PE ratio of 11.5 and offer a 1.6 per cent prospective dividend yield. That’s a low rating for a company that ended 2018 with a record order of £98m, of which £41m is for delivery this year, and continues to win new work.
Chief executive Klaus Heidrich revealed during our results call this morning that Scisys’ enterprise solution division is likely to have won £6m to £8m new contracts in the first quarter this year, a healthy sum in relation to its 2018 closing order book of £12m. Current projects include a contract with Vodafone (for developing a dashboard and reporting tool for the 111 non-emergency number), and a £2m award with Transport for London’s Future Bus Systems programme (to provide software design for timetabling and scheduling).
Scisys’ space division is flying too. Indeed, having Brexit proofed this operationby redomiciling the company to Dublin last autumn, Scisys has been winning a raft of contracts on European Space Agency (ESA) funded projects. In fact, it subsequently won €23.3m (£20m) of new space contracts to lift the division’s order book to £40m. These include an 18-month award worth €11.2m from Thales Alenia Space France (TASF), the prime contractor to the ESA for work on improving security and cyber resilience capabilities in the next phase of the Galileo programme, and two further orders from TASF worth €3m.
Scisys’ media and broadcast division has been winning new work too, landing a 10-year extension worth £20m to its current contract with the BBC for the supply of audio broadcast technology, and receiving orders from 11 of its existing 13 German public broadcasting clients for a new content-distribution platform product.
I would also flag up that although Scisys has moved to IFRS15 accounting, under the previous accounting standard it would have hit its £60m revenue target two years earlier than planned. The board have just outlined their 2022 target of achieving £75m of revenue and operating profit of £7m. Furthermore, with net debt less than 12 per cent of shareholders funds, and the company paying down a low-cost €6m (£5m) Deutsche Bank loan fixed at 2.9 per cent a year, there is an opportunity to deploy some of the free cash on Scisys’ balance sheet on earnings accretive acquisitions.
So, having upgraded my target price to 230p when I last covered the investment case (‘Scisys on a mission for highly profitable growth’, 21 January 2019), I maintain my earlier view that Scisys is a real Brexit winner (‘Exploit a Brexit winner’, 24 October 2018). Buy. (Source: Investors Chronicle)
28 Mar 19. SCISYS Group PLC (“SCISYS”, the “Group” or the “Company”) Unaudited Preliminary Results for the year ended 31 December 2018.
SCISYS Group PLC (“SCISYS” – AIM: SSY; ESM: SCC), the supplier of bespoke software systems, IT-based solutions and support services to the Media & Broadcast, Space, Government, Defence and Commercial sectors, is pleased to announce its unaudited Preliminary Results for the 12 months to 31 December 2018.
Financial and Operational Highlights:
- Adjusted operating profit up 16% to £5.1m (2017: £4.4m restated).
- Revenues up 10% to £58.4m (2017: £53.2m restated), of which the component relating to professional fees increased by 16% to £55.7m (2017: £47.9m restated).
- Record order book of £98.6m (2017: £88.2m restated).
- Net debt reduced to £3.1m (2017: £5.9m) despite exceptional cash outflows.
- Final dividend up 10% at 1.73 pence per share (2017: 1.57p) subject to AGM approval.
- Exceptional charges and amortisation arising on the acquisition of Annova in 2016 contributed to statutory operating profit of £2.5m (2017: £4.5m restated) and basic EPS of 4.9p (2017: 10.8p).
- Adjusted basic earnings per share increased to 13.1p (2017: 9.3p).
- Reported results for 2017 restated to reflect retrospective implementation of 2018’s new revenue recognition accounting standard, IFRS 15.
- Brexit contingency plans executed in November to protect ongoing business in EU-funded European satellite navigation programmes, Galileo and EGNOS.
- Subsequent Galileo contract wins by Space division approaching €20m in value, adding to earlier €3.9m EGNOS order, fully justified establishment of a new Irish Group holding company
- M&B division renewed a long-term BBC maintenance contract extension by at least 7 years and secured 6 new customers from the ARD group of German broadcasters.
- Early termination of Annova ring-fencing arrangements agreed with former owners to close out the earnout period and operate as a single Media Solutions division with M&B from 1 January 2019.
- BBC’s flagship TV news programmes now running live on Annova’s OpenMedia software.
- New customers added to OpenMedia client list, including German Hessischer Rundfunk and French L’Equipe 24.
- ESD division won a £2.4m defence-sector contract and extended its footprint in the transport and logistics domain with a c£2m subcontract win on Transport for London’s Future Bus Systems.
- Company Secretary, Natasha Laird, appointed to the board as Legal Director.
Commenting on the results and prospects, Mike Love, Chairman of SCISYS GROUP PLC said: “I have little doubt that we would not be reporting such a positive picture in respect of revenue growth and future prospects had we not moved early and established a robust strategy to address the political uncertainties that were a serious threat to our space business. The re-domiciliation of the group to Dublin was a complex and expensive exercise but the benefits are already being reflected in our record opening order book and our optimism across all divisions for 2019 and beyond. All of this is underpinned by healthy operational cash flows that have resulted in a substantial reduction in net debt and an uplift in the recommended final dividend.”
27 Mar 19. Orolia, the world leader in Resilient Positioning, Navigation and Timing (PNT) solutions, announced today that it has successfully acquired Skydel Solutions, an innovative GPS/GNSS signal simulation company based in Montreal, Canada. This latest PNT industry news was announced during the Association of the U.S. Army’s Global Force Exhibition in Huntsville, Alabama. With Skydel’s unique capabilities, Orolia now offers customers even more diverse Resilient PNT solutions with new sophisticated testing and simulation protocols, additional customized signals and superior vulnerability assessments for military and commercial applications where GNSS failure is not an option. As the latest addition to the Orolia portfolio, Skydel brand solutions bring a new paradigm to the GNSS simulator scene, by combining innovative algorithms and off-the-shelf hardware to help protect the world’s most critical GNSS-reliant systems operating through GPS, Galileo and other global navigation satellite networks. Skydel technology also supports secure communications signals such as SAASM, M-Code, PRS and other alternative signals with approved partners to provide real-world PNT vulnerability testing for critical infrastructure applications worldwide.
“The need for continuous, reliable GNSS signals is growing exponentially worldwide, particularly for military and commercial systems that depend on accurate PNT data,” said Orolia CEO Jean-Yves Courtois. “The threats to these systems are growing too, whether it’s through signal jamming, spoofing or meaconing. With Skydel’s unique industry expertise, Orolia now offers even more rigorous, broad spectrum testing and simulation solutions to ensure continuous signals, even in GNSS denied environments.”
By combining Graphics Processing Unit (GPU) accelerated computing and software-defined radios (SDR), Skydel-powered simulation solutions generate signals in real time, with uncompromising performance for the most demanding use cases. They are available as complete turnkey systems suitable for all GNSS simulation needs, including everything from compact test benches to complete CRPA test systems.
“Since our inception in 2014, Skydel has enjoyed exponential growth. This strategic move with Orolia will allow us to keep our focus on disruptive innovation and accelerate our global reach,” said Stéphane Hamel, CEO of Skydel.
Orolia is the global leader in end-to-end Resilient PNT solutions, including the latest scalable, modular and cost-effective military PNT technology. With a strong track record of supporting the world’s most PNT reliant, critical defense and commercial applications, Orolia is a proud partner of U.S., NATO and allied forces. Orolia: Time and Location You Can Trust™.
Orolia is the world leader in Resilient Positioning, Navigation and Timing (PNT) solutions that improve the reliability, performance and safety of critical, remote or high-risk operations. With locations in more than 100 countries, Orolia provides virtually failsafe GPS/GNSS and PNT solutions to support military and commercial applications worldwide. www.orolia.com
27 Mar 19. With IMI acquisition, Elbit looks to be a ‘one-stop shop’ for defense needs. Following its acquisition of IMI Systems in November, Israeli company Elbit Systems has entered “a different category of defense companies,” according to its chief financial officer. IMI was a government-owned operation with approximately $500m in revenue, Joseph Gaspar told Defense News. “With the acquisition, it positions us in a totally new and stronger situation in the various markets that we are selling our solutions,” he said, specifically mentioning command-and-control centers.
Gaspar, who is also Elbit’s executive vice president, said the acquisition provides a wholly integrated one-project solution for armored vehicles, for instance, making Elbit a “one-stop shop.”
IMI brings to Elbit know-how in short- and medium-range rockets, precision munitions, and defense systems for armored vehicles.
IMI is not Elbit’s first acquisition. It previously bought Elisra, an electronic warfare company that Elbit helped turn profitable. Gaspar anticipates the same for IMI in 2019. Elbit also acquired Universal Avionics last year, which provides solutions for commercial aircraft.
The combination of the expertise from both Elbit and IMI may prove key for military forces seeking precision munitions that are essential to avoiding collateral damage.
But one challenge post acquisition is that 80 percent of IMI’s revenue comes from the domestic Israeli market, whereas approximately the same percentage of Elbit’s revenue is from international business. Elbit has now restructured itself into five units, so that its Land Division will integrate with IMI’s capabilities; Elbit keep its other units — C4I, ISTAR, electronic warfare and aircraft — separate. A new production facility will be constructed in southern Israel. As IMI is integrated it will take advantage of Elbit’s scale and procurement.
With 1,700 employees in the U.S., Elbit foresees IMI gaining ground with its Iron Fist light active protection system for the U.S. military’s Bradley Fighting Vehicle. If the system performs well, Elbit anticipates more opportunities for IMI expansion in the U.S. This would complement other Elbit programs such as helmets for F-35 fighter pilots, work on the F-16 and F-18 jets, and an electronic fence along the U.S.-Mexico border.
The Integrated Fixed Tower system meant for border security consists of radar, sensors, cameras and night vision.
“We are also the prime contractor on the IFT, the electronic wall between Arizona and Mexico … providing towers along the border — and on those towers a lot of sensors, radar, night vision, day vision, and these are coupled to command-and-control centers,” Gaspar explained. “So when they [the customer] detect an intrusion, they analyze it and give guidance to the forces to check it and do what they do. We are waiting on the decision on this active issue.” (Source: Defense News)
26 Mar 19. Resilience Capital Partners Announces Acquisition of Systron Donner Inertial. World’s Leading Supplier of High-Performance Sensors and Systems for Aerospace and Defense Applications Continues under American Ownership. Resilience Capital Partners, a private equity firm that invests in middle-market companies, announced it has acquired Concord, California-headquartered Systron Donner Inertial. As the world’s leading supplier of quartz microelectromechanical systems (QMEMS) used in inertial sensing products that provide precision guidance, navigation and locational solutions, Systron Donner develops products that have been used in everything from business aircraft to fighter jets to the MARS Rover.
“Systron Donner is an important player in an industry that is critical to America’s future economic prosperity, leadership in aviation and national security,” said Steven H. Rosen, co-chief executive officer of Resilience Capital Partners. “Technology and innovation leadership is important for our nation’s future, and Systron Donner has been at the forefront of developing high-performing, made-in-America inertial sensors and systems for more than 50 years.”
Systron Donner’s QMEMS technologies are used in gyroscopes, accelerometers, inertial measurement units and inertial navigation system/GPS products that provide highly precise and reliable stabilization, geo-location, guidance, navigation and flight control solutions for aerospace, marine and land vehicles and systems.
Among the leading users of Systron Donner products are a leading defense contractor; a premier aerospace company; a civil and defense aerospace manufacturer; a leader in helicopter production; and a naval research agency. Systron Donner’s customers have frequently honored it for superior performance; in 2018, the firm received a leading defense contractor’s Supplier Excellence Award for the second consecutive time.
The future for such sensing products is highly promising. The market for inertial navigation systems alone is projected to grow from $9.54bn in 2017 to $12.26bn by 2022, a compound annual growth rate of 5.15 percent, according to an analysis by the business forecasting firm ResearchAndMarkets.
“Systron Donner’s proprietary technologies, the increasing size of the inertial sensing market and the company’s long history of relationships with a roster of blue-chip customers make this a company with strong potential,” said Rosen. “We look forward to working with the Systron Donner team to maximize this opportunity.”
The continued domestic development and manufacture of products for the aerospace and defense industries is seen as vital, given fears that a decline in American technology leadership could impair national security. Recent analyses, including a whitepaper authored by experts from the Institute for National Strategic Studies and a study prepared by a team assembled by the Office of the Director of National Intelligence and the U.S. Department of Homeland Security, have underscored these concerns. Terms of the transaction were not disclosed.
About Resilience Capital Partners
Headquartered in Cleveland, Ohio, Resilience invests in niche-oriented manufacturing, value added distribution and business service companies with sustainable market positions and a clear path to cash flow improvement. Resilience targets platform businesses with $25m to $250m in revenues across a broad range of industries where it can improve a company’s operations, competitive positioning and profitability. Resilience manages in excess of $685 m for its global investor base which includes pension funds, insurance companies, foundations and endowments, fund of funds and family offices. For more information, please visit www.resiliencecapital.com. (Source: BUSINESS WIRE)
26 Mar 19. Aria Insights, Formerly CyPhy Works, Closes Doors. Aria Insights, formerly known as CyPhy Works, has shut down, The Robot Report has learned. Danvers, Mass.-based Aria Insights raised $39m over seven funding rounds, according to Crunchbase. The last funding came in June 2018 when it raised $4.6m in debt financing. The company was primarily known for its Persistent Aerial Reconnaissance and Communications (PARC) platform, a tethered drone that provided secure communication and continuous flight to customers. It relied heavily on law enforcement and military contracts. Aria was also marketing the PARC drone to oil and gas, first responders and telecommunications customers.
There are other tethered drones on the market, including Elistair in France, Hoverfly in Orlando, Fla., Drone Aviation Corp. in Jacksonville, Fla., and NTP Inc. in Crystal Lake, Ill., to name a few. In another notable drone shutdown, San Francisco-based Airware closed in September 2018 after having raised $118m from investors such as Andreessen Horowitz, Google’s GV, and Kleiner Perkins.
CyPhy Works was founded in 2008 by Helen Greiner, who also co-founded iRobot in 1990. Greiner left CyPhy Works in 2017 and in June 2018 was named an advisor to the US Army for robotics, autonomous systems and AI.
CyPhy Works rebranded as Aria Insights in January 2019 to focus more on using artificial intelligence and machine learning to help analyze data collected by drones. “A number of our partners were collecting and housing massive amounts of information with our drones, but there was no service in the industry to quickly and efficiently turn that data into actionable insights,” Lance Vanden Brook, former CyPhy and current Aria CEO said at the time of the rebranding. “Moving beyond just a hardware provider, Aria is now a full-service solution that not only meets customers’ aerial needs, but also processes analytics that enable insightful decision making.” (Source: UAS VISION/The Robot Report)
26 Mar 19. Rheinmetall completes its force protection portfolio with takeover of IBD Deisenroth. Rounding out its portfolio in the field of protection technology for military vehicles, the Düsseldorf-based Rheinmetall Group is taking over the operational assets of IBD Deisenroth Engineering GmbH of Lohmar, Germany. Contractual agreements to this effect have now been reached. The parties have agreed not to disclose the purchase price. The transaction is to take effect on 1 June 2019.
The buyout reinforces Rheinmetall’s position as a major supplier of advanced defence technology to the ground forces of Germany, its allies and other likeminded nations. IBD Deisenroth Engineering is a world-renowned supplier of passive protection systems, principally for military vehicles. The company has around 120 employees. Sales last year came to roughly €35m.
25 Mar 19. By Light Professional IT Services last week acquired Phacil Inc. in a deal that expands its offerings to the federal government. Terms of the deal, which was completed March 15, were not disclosed. Both companies have about 600 employees. By Light, which is based in Northern Virginia, provides program management, systems design and engineering, satellite communications, information assurance, rapid prototyping, federal healthcare and other services for classified and unclassified government networks. Some of the company’s customers include the Navy, Departments of Agriculture, Justice, State and Veterans Affairs, and the National Security Agency. Phacil, which is also based in Northern Virginia, provides mission-focused technology solutions to the Defense Department and federal civilian customers. Its core capabilities are in software services, systems engineering, integration and operations, cyber security, cloud and managed services, service desk support, and artificial intelligence.
“We are thrilled to acquire Phacil, which has a proven track record of excellent service and growth,” Bob Donahue, CEO and found of By Light, said in a statement. “Its diversified IT capabilities across a wide customer base make it an excellent fit with our company, and will allow us to expand our offering to better serve our customers.” By Light is a portfolio company of Sagewind Capital. In 2018, By Light acquired Axom Technologies. The McLean Group served as Phacil’s financial adviser on the deal. (Source: Defense Daily)
25 Mar 19. Rolls-Royce’s biggest investor cuts stake in engine maker. ValueAct’s shift comes as CEO East enjoys bumper 2018 payout. Rolls-Royce’s biggest investor cut its stake in the aero-engine maker as the chairman expressed “regret” for the disruption caused to airline customers due to persistent problems with its Trent 1000 engines over the past year. The move came as the group revealed that despite last year’s turbulence its chief executive Warren East saw his annual remuneration soar about 70 per cent to £3.94m last year as long-term incentives vested for the first time in four years. The FTSE 100 company, which suffered a slight dip in its share price, has been trying to recover from long-running problems with its Trent 1000 engines, which power Boeing’s 787 Dreamliner passenger jet, that forced the group into the red last year. ValueAct Capital, which became Rolls-Royce’s biggest shareholder in 2015, said it had cut its stake to 9.48 per cent from 10.94 per cent. The activist investor was given a board seat a year later on a promise that it would not publicly lobby for a break-up of the jet engine maker. The remuneration package for 57-year-old Mr East included a base salary of £944,000, just over £1m or 107 per cent of his base salary as an annual bonus, £1.73m paid out under a 2016 long-term incentive plan, and pension benefits. Although the chief executive’s annual bonus was lower than in the previous year, reflecting lower-than-expected engine deliveries to customers, the total remuneration still dwarfs the £2.33m he received in 2017.
Rolls-Royce defended the bumper payout, noting: “Warren’s annual bonus is down year-on-year as a result of missing our targets for delivery to customers in the latter stages of 2018, though we performed strongly in terms of underlying profit and cash flow.” The spokesperson added: “Over the three years since the start of 2016, however, Rolls-Royce has performed strongly in terms of cash, earnings and returns to shareholders and as a result Warren’s overall pay has increased following the first successful payout of our long term incentive plan in four years.” The company said in February it would increase the exceptional charge related to problems with its Trent 1000 engines by £236m for the full year to £790m. The increase “reflects a contribution to customer disruption costs,” the company said at the time. The additional charges, including £186m on its Trent 900 programme following the decision by Airbus to stop production of the A380 superjumbo, drove Rolls-Royce to a full-year operating loss of £1.16bn.
Ian Davis, Rolls-Royce chairman, conceded that the Trent 1000 engine issues had “caused pain for us and even more importantly for many of our customers”. “In the end, businesses are there for their customers and we very much regret the disruption caused. This has been an area of continuing focus and oversight by the board,” he said in the annual report. Rolls-Royce under Mr East has embarked on an ambitious restructuring programme, including a streamlining of its corporate structure and the loss of 4,600 middle-management jobs. Mr Davis admitted that the company’s “pace of implementation has been uneven”. Nevertheless, “the signs of progress are clear”. “Your board and management team absolutely recognise the need to improve our operational competitiveness and performance, particularly in our Civil Aerospace business,” Mr Davis added in the report. The company said on Monday that no executive directors would be entitled to salary increases in 2019. The bonus for 2019 would also include an additional measure of aircraft on the ground to reflect any disruption to airline customers from engine problems. Rolls-Royce reiterated previous comments that it had implemented contingency plans to prepare for a hard Brexit, including building up inventory. “We will keep our contingency measures under review during the Brexit process and the board is regularly updated on our risk mitigation activities,” the company said. (Source: FT.com)
25 Mar 19. Inmarsat shares rocket higher after agreeing US$3.4bn takeover by private equity-led consortium. Inmarsat said it considers the terms of the acquisition to be “fair and reasonable” and recommended shareholders approve the offer. Inmarsat will continue to operate as a standalone business after the deal is completed. Inmarsat Plc (LON:ISAT) has agreed to be taken over by a private equity-led consortium in a deal that values the British satellite operator at US$3.4bn. The consortium, which includes private equity firms Apax Partners and Warburg Pincus as well as pension funds Canada Pension Plan Investment Board and Ontario Teachers’ Pension Plan, will pay US$7.21 a share in cash. The offer was made on January 31 but Inmarsat only revealed that it was considering the approach last Tuesday after a leak. In sterling terms, Inmarsat said the 546p per share bid represents a 45% premium to its 377p closing price the day before press speculation on February 28 of a possible deal.
Consortium recognises need for continued investment, says Inmarsat
Inmarsat said it considers the terms of the acquisition to be “fair and reasonable” and recommended shareholders approve the offer.
“The expertise and skills of our employees, together with continued investment in our technology and infrastructure, are integral to delivering on our growth potential,” Inmarsat non-executive chairman Andrew Sukawaty said.
“We are pleased that the consortium recognises this and that we are able to present this offer to shareholders.”
The consortium said it believes Inmarsat is “well positioned for growth based on its unique global infrastructure, leading technological and capacity roadmap and strong spectrum holdings”.
Inmarsat has “predictable revenues” from a range of long-term contracts with governments and other financially secure customers, it added.
“As experienced and long-term investors in telecommunications, the consortium values and admires Inmarsat for its proven expertise in maritime, aviation, defence and broadband satellite communications, alongside its strong market positions and potential for growth,” it said.
“Our planned ownership will enable this innovative British company to fulfil its ambitions to become a global leader in next-generation satellite communications, including the fast-growing market for commercial aviation in-flight connectivity.”
The consortium plans to maintain Inmarsat’s UK headquarters and the company will continue to operate as a standalone business.
Counterbid speculation cools
The deal comes after EchoStar ditched a takeover of its British rival last year. In recent weeks, there has been market speculation EchoStar would return with a counter bid for Inmarsat but those expectations have cooled following Monday’s announcement.
“The acceptance for an all cash offer of $7.21 (roughly equivalent £5.45) comes as a surprise to me as I suggested last week that Inmarsat would hold off given that this offer is only marginally higher than the previous one which at the time management felt undervalued the business,” said Helal Miah, investment research analyst at The Share Centre.
“This becomes increasingly surprising now we have some of the key factors which held the business back, such as the Maritime division, showing signs of abating, and very good prospects for its In-Flight broadband service.
“However, some investors will welcome this news since the shares have been languishing until recent takeover speculation.”
Inmarsat’s shares have suffered in recent years following a period of poor performance and an uncertain outlook, making it an attractive takeover target.
The company has been owned by private equity firms previously. Apax and Permira purchased a majority stake in the firm in 2003 before floating it in 2005. In morning trading, shares in Inmarsat jumped 8.6% 550.20p. (Source: proactiveinvestors.co.uk)
25 Mar 19. Hong Kong satellite company reports challenging competition in Asia-Pacific. APT Satellite has noted in its annual financial report that the Hong Kong company is finding the satellite transponder market in the Asia-Pacific region challenging due to “fierce competition” in the area.
While reporting that its global revenue has risen 2.5 per cent for the year, APT echoed the sentiments of other regional competitors by noting the challenges faced in the Asia-Pacific.
“Looking into 2019, the global and Asia-Pacific region satellite transponder market is continuing under the condition of oversupply and fierce competition,” the company said.
This is similarly recognised by competing businesses AsiaSat of Hong Kong and Thaicom in Thailand, which noted that pricing pressure had an impact on their financial results for the year.
APT Satellite has launched two new satellites in the past year, Apstar-6C on a Chinese Long March 3B/E rocket in May, and Apstar-5C, a Telesat-owned spacecraft that APT Satellite helped finance and design, in September on a SpaceX Falcon 9. These satellite’s added Ka-band capacity to Apstar-6C and Ku-band capacity on Apstar-5C, as well as replacing older spacecraft. The company also has plans to launch its next satellite, Apstar-6D, “to be delivered on ground at the end of 2019”, with partners confirming the craft remains on track for a launch this year. Currently, APT Satellite owns and operates five in-orbit satellites – Apstar-5, Apstar-6, Apstar-7, Apstar-9 and Apstar-6C – covering regions in Asia, Europe, Africa, Australia and the Pacific islands, which contain about 75 per cent of the world’s population. (Source: Space Connect)
25 Mar 19. The FT reported today that a consortium led by private equity groups Apax and Warburg Pincus is set to acquire satellite communications company Inmarsat in a deal that values the UK group’s equity at $3.4bn, the companies said on Monday. Alongside Canada’s CPPIB and Ontario Teachers’ Pension Plan Board, the groups will pay $7.21 in cash per Inmarsat share and will take the entire group private. The offer represents a 27 per cent premium to the closing price of £4.31 per Inmarsat share on March 18. Including debt, the offer values the company at about $6bn. The deal is expected to be completed by the end of the year, pending regulatory approvals. The group of investors said: “The satellite sector is attractive, with unique characteristics, including long lead times and the need for deep technical expertise, while operators in the sector require strategic management and a long investment horizon”. The group also said Inmarsat was well placed “for growth based on its unique global infrastructure, leading technological and capacity road map and strong spectrum holdings”. But the transaction comes after the satellite business, which will continue to be based in the UK, had struggled to attract investors because of recent poor performance. EchoStar, for instance, ditched a takeover attempt last year. It emerged last week that the London-listed company had received a non-binding offer from the consortium. Previous interest from EchoStar and Eutelsat has raised hopes of a counterbid for the British company. However the large cash element of the offer has cooled expectations that a rival offer will be placed. JPMorgan Cazenove, PJT Partners and Credit Suisse advised Inmarsat on the potential transaction. (Source: FT.com)