Luxembourg-based satellite operator, SES has agreed to purchase rival Intelsat for €2.8 billion, after previous merger talks between the two firms fell through last year.
The announcement promises that the combined entity will create a ‘stronger multi-orbit operator’ with greater coverage, improved resiliency, expanded suite of solutions, and enhanced resources to profitably invest in innovation.
The combined fleet will encompass more than 100 Geostationary Earth Orbit (GEO) and 26 Medium Earth Orbit (MEO) satellites. By the end-2026, 8 new GEO (including 6 software-defined) satellites and seven new MEO (O3b mPOWER) satellites are expected to be launched.
The transaction has been unanimously approved by the board of directors of both companies. According to the release, the deal will deliver €2.4 billion (NPV) of synergies (85 per cent of equity consideration) with 70 per cent executed within three years after closing.
Combined they have a gross backlog of €9 billion, expected yearly revenue of €3.8 billion, and adjusted EBITDA of €1.8 billion. Meanwhile around 60 per cent of revenue will be in ‘high growth segments.’
“This important, transformational agreement strengthens our business, enhances our ability to deliver world-class customer solutions, and generates significant value for our shareholders in a value accretive acquisition which is underpinned by sizeable and readily executable synergies,” said CEO of SES, Adel Al-Saleh.
“In a fast-moving and competitive satellite communication industry, this transaction expands our multi-orbit space network, spectrum portfolio, ground infrastructure around the world, go-to-market capabilities, managed service solutions, and financial profile. I am excited by the opportunity to bring together our two companies and augment SES’s own knowledge base with the added experience, expertise, and customer focus of the Intelsat colleagues.”
CEO of Intelsat, David Wajsgras, added: “Over the past two years, the Intelsat team has executed a remarkable strategic reset. We have reversed a 10-year negative trend to return to growth, established a new and game-changing technology roadmap, and focused on productivity and execution to deliver competitive capabilities. The team today is providing our customers with network performance at five 9s and is more dedicated than ever to customer engagement and delivering on our commitments. This strategic pivot sets the foundation for Intelsat’s next chapter.”
