The transaction is expected to close before the end of the first quarter of 2021, subject to regulatory approvals.
Satellite operator Intelsat has announced that it has entered into an agreement to acquire the commercial aviation business of Gogo, a global provider of in-flight broadband connectivity.
The deal has been pegged at $400m in cash, subject to customary adjustments. The transaction is expected to close before the end of the first quarter of 2021, subject to regulatory approvals and other customary closing conditions.
On August 31, the US Bankruptcy Court for the Eastern District of Virginia, Richmond Division, approved Intelsats consummation of the transaction.
The transaction further propels Intelsats efforts in the growing commercial in-flight connectivity market, pairing its high-capacity global satellite and ground network with Gogos installed base of more than 3,000 commercial aircraft to redefine the connectivity experience.
PJT Partners served as financial advisor and Kirkland & Ellis served as legal counsel to Intelsat. Alvarez & Marsal advised Intelsat on accounting, operational and tax matters related to the transaction. Altman Solon served as the commercial advisor.
Gogos commercial aviation business provides Intelsat with key airline relationships and customer-facing capabilities, including a software platform, ISP and network management infrastructure. It currently serves 21 commercial airlines, including nine of the top 20 global carriers.
“Consumer demand for in-flight connectivity is expected to grow at a double-digit rate over the next decade, notwithstanding the impact of Covid-19. The addition of Gogo’s commercial aviation business provides compelling strategic value for our stakeholders and makes strong commercial sense,” said Intelsat CEO Stephen Spengler. “Gogo’s business is a perfect fit with Intelsats expansive satellite network and infrastructure due to the breadth of Gogo’s technological solutions, global reach and operational excellence.”
Spengler continued: “A priority growth objective for Intelsat is to extend our reach closer to the millions of customers who use our satellite capabilities to stay connected around the world. The addition of Gogo’s commercial aviation business is a significant step toward this goal. We are growing beyond satellite connectivity to expand into consumer-optimised managed services.”
“We are excited to welcome the talented people of Gogo’s commercial aviation business to the Intelsat family and look forward to pairing their aviation expertise with Intelsats owned network capability to unlock new opportunities for growth. Our ability to execute this transaction in the midst of our financial restructuring speaks to the strength of our underlying business, our vision for the future, the commitment of key Intelsat stakeholders and the momentum that we have maintained over the past several months,” Spengler added.