Globalstar Merges with FiberLight, Acquires Assets
Thursday, April 26, 2018 | Comments

Globalstar signed a merger agreement with Thermo Acquisitions, under which metro fiber provider FiberLight and 15.5 million shares of CenturyLink stock will be combined with Globalstar, along with $100 million of cash and minority investments in complementary businesses and assets of $25 million in exchange for Globalstar common stock valued at about $1.65 billion.

Jay Monroe, executive chairman of the board of directors and CEO of Globalstar, controls Thermo Acquisitions. The parent company will be renamed Thermo Companies, and its stock will continue to trade publicly.

The transaction has been unanimously recommended by a special committee of the board of directors of Globalstar, consisting of independent directors, and unanimously approved by the full board of directors. The merger is expected to close in the third quarter.

“This transaction brings together strategic assets that are critical to the complex needs of next-generation networks, allowing service providers to deliver the sophisticated services their customers increasingly expect,” Monroe said. “The combined entity is uniquely positioned to meet a broad range of customer requirements, from low latency and high-capacity networks, to consistent connectivity across large geographical areas. Long-term shareholders should benefit significantly from the combined entity’s strong balance sheet and recurring revenue from the portfolio of satellites, spectrum, fiber infrastructure and other related assets.”

FiberLight serves 40 of the top 50 U.S. bandwidth providers across about 14,000 route miles. Thermo Investments has initial investments in CenturyLink stock valued at about $275 million, minority investments in Pivotal Commware and push to talk (PTT) provider Orion Labs, plus $100 million of investable cash. The combined entity expects combined net debt at end-2019 of less than $200 million.

The merger will organize the pro forma company into four principal operating subsidiaries under the name Thermo Companies. These operations include Globalstar, FiberLight, Global SpectrumCo and Thermo Investments.

The merger is expected to create a fundamentally stronger company with significantly reduced leverage and diversified holdings serving the global telecommunications industry, a statement said. The pro forma company is expected to benefit from Globalstar’s $1.7 billion U.S. net operating losses, allowing growth in a tax-efficient manner.

Globalstar believes the merger will best position the company for monetizing its 2.4 GHz terrestrial spectrum in addition to maximizing the global opportunities to participate in terrestrial deployments of all four of its spectrum bands. Globalstar is seeking standardization approval of its 2.4 GHz spectrum, which is proceeding under a Third Generation Partnership Project (3GPP) working item with expected approval in the next year.

Globalstar reached an agreement in principle with its lenders. Upon completion of the merger, Thermo Companies expects to initiate a rights offering of up to $100 million for minority shareholders. The rights offering would be consummated about 45 days following closing, is expected to be available to holders of record on the date of closing and will include an over-subscription privilege allowing for the subscription of additional shares with allotments otherwise on a pro rata basis.

Monroe will increase his beneficial ownership in the pro forma company from a fully diluted ownership of about 58 percent to between 83 and 87 percent at closing.

Would you like to comment on this story? Find our comments system below.​

Post a comment
Name: *
Email: *
Title: *
Comment: *


No Comments Submitted Yet

Be the first by using the form above to submit a comment!

Site Navigation