PE-backed Inmarsat sold to Viasat in USD 7.3bn deal

The USD 7.3bn sum is comprised of USD 850m in cash and 46.36 million shares of Viasat common stock valued at USD 3.1bn, as well as the assumption of net debt of USD 3.4bn.

On closing the sale, which is expected in H2 2022, the selling shareholders are expected to hold approximately 37.5% of the combined group, with each party receiving shares representing less than 10%.

The combined companies are expected to post revenues of USD 4.1bn, operating 19 in-orbit satellites and with a further 10 vehicles under construction.

Inmarsat is currently estimated to post adjusted EBITDA of USD 740m, according to Reuters, implying an enterprise value multiple of 10x.

According to a report from Bloomberg earlier in November 2021, Apax and Warburg Pincus were considering selling their shares in Inmarsat. The parties were exploring a structured process with various bidders, as well as a potential listing, according to the report.

Apax Partners, Warburg Pincus, CPP Investments and OTTP acquired Inmarsat in a take-private that valued the company at USD 6bn in 2019.

Apax invested via its USD 9bn, 2016-vintage Apax IX fund. Warburg Pincus invested via Warburg Pincus Global Growth Fund, which held a final close in November 2019 on USD 14.8bn. CPP made a financial commitment of approximately USD 900m, according to Unquote Data.

Barclays, Bank of America and UBS arranged a debt package comprising a USD 1.75bn term loan B and a revolving credit facility of USD 700m to back the deal, according to Unquote Data.

Other satellite operators currently in the market include France-headquartered Eutelsat, according to Unquote sister publication Mergermarket. BPI France holds a 20% stake in the listed company, while the French investment fund Fonds Strategique de Participations (FSP) holds 7.58%.

Mergermarket reported earlier November that bids for the company could be put on hold ahead of France's upcoming presidential election in April 2022. The company rejected an offer from private investor Patrick Drahi in September 2021, with Mergermarket reporting the following month that the rejection could provoke rival bids from market peers including Inmarsat. Eutelsat has a market capitalisation of approximately EUR 2.9bn.

Previous funding
Apax Partners and Permira acquired Inmarsat, which was privately owned at the time, via a USD 1.538bn recommended cash offer in 2003. The company was listed on the London Stock Exchange in June 2005, with the sponsors making subsequent placements to sell their remaining stake.

Company
Founded in 1979 by the International Maritime Organization, Inmarsat is a mobile satellite communications company serving the aviation and maritime sectors, as well as businesses and governments. The company offers data and communications services related to security, defence, agricultural management and emergency responses.

In 2018, prior to its take-private, Inmarsat generated revenues of USD 1.46bn and EBITDA of USD 770m.

People
Apax Partners – Salim Nathoo (partner); Gonzague de Lhoneux, Jesús Rueda (principals).
Inmarsat – Rajeev Suri (CEO).
Viasat – Rick Baldridge (CEO).

Advisers
Vendor – Kirkland & Ellis, Stuart Boyd, Rory Mullarkey, Jacob Traff, Carlo Zenkner, Edward Lee, Ben Hai, Jack Evans, Moose Safraz, Anthony Antioch, Frank Liu, Neel Sachdev, Leon Daoud, Eric Wedel, Ben Steadman (legal); Kirkland & Ellis, Alan Walker, Sara Zablotney, Adam Kool (tax); Clifford Chance (legal); Steptoe & Johnson (legal).
Acquirer – PJT Partners (corporate finance); Barclays (corporate finance); JP Morgan (corporate finance); Trinity Advisers (corporate finance); Linklaters (legal); Latham & Watkins (legal).

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