ViaSat buying Inmarsat for $7.3 billion

Broadband company ViaSat is purchasing mobile satellite communications provider Inmarsat for $73 billion. The combination of the two geosynchronous earth orbit (GEO) operators comes on the heels of last week’s Federal Communications Commission filing surge for LEO-based broadband networks.

Under the deal, privately-held Inmarsat will receive $850 million in cash, 46.36 million shares of ViaSat common stock valued at $3.1 billion based on the November 5, 2021 closing price, and ViaSat will assume $3.4 billion in Inmarsat debt.

“This is a transformative combination that advances our common ambitions to connect the world. The unique fusion of teams, technologies and resources provides the ingredients and scale needed for profitable growth through the creation and delivery of innovative broadband and IoT services in new and existing fast-growing segments and geographies,” said Viasat’s Executive Chairman Mark Dankberg. “Inmarsat’s dual-band global mobile network, unique L-band resources, skills and capabilities in the U.K. and excellent technical and operational talent worldwide, are powerful complements to Viasat’s business. Together, we can advance broadband communications and create new hybrid space and terrestrial networks that drive greater performance, coverage, speed, reliability and value for customers. We look forward to welcoming the Inmarsat team into the Viasat family.”

The merger of the two companies should see little or no overlap in terms of services. ViaSat operates a fleet of Ka-band broadband satellites, delivering services to residential, aviation, and defense customers while Inmarsat’s fleet of L-band/S-band satellites provide global broadband and narrowband services to maritime, mobility, government, and enterprise sectors, with an increased emphasis on IoT of late.

ViaSat is planning to deploy a global Ka-band footprint to include polar coverage and has filed to deploy a network of low earth orbit (LEO) satellites. Inmarsat also had filed to build a LEO constellation of satellites and it isn’t clear how the merger will affect those two projects.

The merger is expected to “deliver meaningful and enduring capital, operating and cross-selling revenue synergies, with operating and capital expenditure synergies alone expected to drive value creation of $1.5 billion on an after-tax NPV basis,” with additional benefits coming from merging their respective satellite constellations into a joint global network.

Doug Mohney

Doug Mohney, a principal at Cidera Analytics, has been working and writing about IT and satellite industries for over 20 years. His real world experience including stints at two start-ups, a commercial internet service provider that went public in 1997 for $150 million and a satellite internet broadband company. Follow him on Twitter at DougonTech or contact him at dmohney139 (at) gmail (dot) com.

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