Marlink admits Providence, I-Squared, CVC to second round of sale

Amy-Jo Crowley, Maryna Irkliyenko, Charlie Taylor-Kroll
22 June 2021

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Providence, I Squared Capital and CVC Partners are among a select pool of suitors admitted to the second round of bidding for Marlink, according to four sources familiar with the matter.

Bidders for the French satellite communications company were shortlisted at the beginning of June, one of the sources and a fifth source familiar said.

Binding offers are due on 12 July, one of the sources added. Owner Apax France is looking for bids in the region of 10x EBITDA, one of the sources said.

Marlink is being marketed off EBITDA in the $130-150m range, depending on adjustments, two of the sources said. EBITDA is around $165m including adjustments for its acquisition of satellite communications solution provider ITC Global from Panasonic, another source said.

Apax, advised by BNP Paribas and Goldman Sachs, widened the sale process last month to private equity and infrastructure investors to gauge interest in the business, as reported by Mergermarket.

After the process opened to other sponsors, some parties dropped out due to a lack of data available on due diligence questions, one of the sources said.

Inmarsat's approach for the company earlier this year put off sponsors given it is a key supplier of satellite bandwidth to Marlink, this source and another source said. "There could be concerns about how Marlink's relationship would work with Inmarsat in the future," one of them added.

Inmarsat's bid for the business is rumoured to have been in the region of $1.3bn, two of the sources said. Its offer was "20% higher" than this mooted price, according to the fourth source. Talks between both companies ended mainly due to a gap in valuation expectations and concerns that Inmarsat is a key supplier of satellite bandwidth to Marlink, as reported.

The sell-side could still use Inmarsat's offer as a fallback option if sponsors' bid are not high enough, two of the sources said.

A sponsor buyer could use Marlink as a platform to consolidate the market, although there may not be enough targets for consolidation following a flurry of M&A activity in the last year, as previously reported. The company has scope to grow and cater to a wider set of customers as it advances its technology, the report added.

Apax, Marlink, CVC, Providence and Inmarsat declined to comment. I-Squared, Goldman Sachs and BNP Paribas did not respond to requests for comment.