Viasat to acquire Inmarsat in merger of satellite services providers

Viasat Inc. (NASDAQ: VSAT) and satellite communications services provider Inmarsat have reached an agreement for the former to acquire the latter via a transaction worth $7.3 billion, split between $850 million in cash, approximately 46.36 million shares of Viasat common stock valued at $3.1 billion based on the closing price on Friday November 5, 2021, and the assumption of $3.4 billion of net debt. The companies believe the combined company will become a juggernaut in communications, defense, and space, this last with a focus on the UK.

At closing, which the companies expect will occur in the second half of next year, Inmarsat shareholders will receive an aggregate of 37.5% of Viasat stock on a fully diluted basis, with each of the existing Inmarsat shareholders receiving shares representing less than 10%.

The combined company will leverage Viasat’s and Inmarsat’s collective spectrum, satellite, and terrestrial assets to create a single hybrid space and terrestrial network to serve the needs of the commercial and government markets. The network, say the companies, will combine the best attributes of multi-band, multi-orbit satellites and terrestrial air-to-ground systems to meet high-bandwidth, high-speed requirements at locations such as airport and shipping hubs. The company will be particularly rich in Ka-Band and L-Band capabilities. The combined company also will enjoy an extended market reach, as Viasat has focused on North America and London-based Inmarsat on Europe and the rest of the world (although it does have a presence in Canada).

"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," said Viasat's Executive Chairman Mark Dankberg. "Inmarsat's dual-band global mobile network, unique L-Band resources, skills and capabilities in the UK 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."

"Joining with Viasat is the right combination for Inmarsat at the right time," said Rajeev Suri, CEO of Inmarsat. "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 UK has a strong and sustainable presence in the critical space sector for the long term."

"This strategic move gives Viasat the scale to increase the pace of innovation that drives new and better services for our customers, broadens the opportunities for our employees, and provides a foundation for significant positive free cash flow, with potential upside from a revitalization of L-band and IoT service growth. Plus, we will have expanded scale and presence in the $1.6 trillion broadband and IoT sectors,” concluded Rick Baldridge, Viasat's president and CEO. “I'm excited about the opportunities ahead and looking forward to setting up the combined organization for long-term success."

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