Speedcast to Buy Globecomm for $135M
Tuesday, August 28, 2018 | Comments

Speedcast International entered into a definitive agreement to acquire Globecomm Systems from affiliates of HPS Investment Partners, Tennenbaum Capital Partners and certain other members of Globecomm for an estimated net purchase consideration of $135 million, including expected purchase price adjustments.

Globecomm is a provider of remote communications and multinetwork infrastructure to government, maritime and enterprise sectors in more than 100 countries. The acquisition strengthens Speedcast's global competitive position in these sectors by enhancing its current solutions and complements the recent acquisition of UltiSat, doubling Speedcast's revenue in the government sector, and adding more scale, visibility and capabilities the market. In addition, Globecomm will benefit from Speedcast's scale and capabilities in the maritime and enterprise markets, a statement said.

"This acquisition of Globecomm is fully in line with our strategy to consolidate our industry and thus build competitive advantages based on scale and capabilities," said Speedcast CEO Pierre-Jean Beylier. “Globecomm is particularly complementary to UltiSat as it strengthens Speedcast's position serving government customers at a time when government spending globally is expected to rise. … We expect to drive significant cost and revenue synergy potential from this acquisition, given the strong financial and operational benefits of scale across core verticals."

Speedcast estimates it will generate more than US$15 million in annual cost synergies within 18 months after the acquisition. The cost synergies are expected to be generated across the business, including through footprint rationalization, network improvements and improved procurement.

The acquisition will be funded by a fully underwritten US$175 million add-on to Speedcast's existing seven‐year senior secured credit facility (due 2025) from the U.S institutional term loan market, which will also be used to repay a portion of Speedcast's revolving credit facility and thus enhance Speedcast's liquidity position.

The transaction is expected to close in the fourth quarter, subject to the customary closing conditions and regulatory approvals.

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