Satellite communications company Viasat has taken a leap into the maritime space with a $7.3bn takeover of UK-headquartered Inmarsat.
The transaction will see California-headquartered outfit offer $850m in cash and 46.3m shares worth an estimated $3.1bn to merge with Inmarsat. It will also assume $3.4bn in the London-based company's debt.
Inmarsat is a leading name in providing satellite communications to the shipping space, with some 130,000 vessels as safety customers and 41,000 ships connected to its broadband services. The sector represented $391m in revenue in 2020, with $403m estimated this year.
Viasat said on Monday that, among the benefits of the transaction, it sees the Inmarsat maritime position as complementary to its own energy business. Shipping is a sector where there is an opportunity to enhance services to the existing maritime customer base, the company said in a presentation outlining the transaction.
The US company's business already has strength in the North American residential and aviation markets, as well as defence communications.
"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," said company executive chairman Mark Dankberg.
"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."
Viasat said that once the merger is cemented, it will integrate its assets with those of Inmarsat, creating a global, high-capacity network of terrestrial and space-based communications.
"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," said Viasat chief executive Rajeev Suri.
"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."
When the transaction is complete, Inmarsat shareholders will own 37.5% of Viasat, and is expected to create $1.5bn in capital expenditure synergies.
To help pay for the deal, Viasat has signed financing commitments for $2.3bn in new debt facilities. It will assume $1.7bn in Inmarsat bonds and $2.4bn in credit facilities.
The deal is expected to close in the second half of 2022.
