08 Nov 21. The FT reported today that ViaSat, the California-based satellite company, is taking over Britain’s Inmarsat in a $7.3bn cash and share deal that will create one of the world’s biggest space-based broadband providers. The deal, in which Inmarsat’s private equity owners will hold 37.5 per cent of the combined group, is expected to trigger other bids in a highly fragmented industry. The agreed offer follows a failed approach for rival Eutelsat by French cable entrepreneur Patrick Drahi last month. It comes as investors push up valuations for space-based companies, spurred by falling launch costs and the potential to deliver a range of mobility and data services from cheaper satellites, many at lower earth orbits. However legacy operators of satellites at higher geostationary orbits have suffered from declining broadcast revenues and are facing a huge capacity glut.
Inmarsat has long been seen as a key chip in the consolidation of the sector with rivals EchoStar and Eutelsat having looked at a deal in the past. However the UK company was sold to a consortium led by Apax and Warburg Pincus in 2020. A move this year to appoint Rajeev Suri, the former Nokia chief executive who consolidated the telecoms equipment market, was seen as a move by Inmarsat’s owners to either sell the company or move on a rival. Suri said: “Joining with ViaSat is the right combination for Inmarsat at the right time.”
ViaSat will acquire Inmarsat in a transaction comprising $850m in cash and 46.36m in shares, valued at $3.1bn based on the closing price on November 5, which represents a 37.5 per cent stake in the enlarged company. ViaSat will also assume $3.4bn of Inmarsat’s net debt.