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)