Acquisition will Enhance Market Position in Government, Maritime and Enterprise Sectors
Completes Globecomm Acquisition
Globecomm is a leading provider of remote communications and multi-network infrastructure in over 100 countries and the acquisition strengthens Speedcast's global leadership with enhanced competitive positions in Government, Maritime, and Enterprise. The acquisition complements Speedcast's acquisition of UltiSat in November 2017 by doubling Speedcast's revenue in the Government sector and adding more scale, visibility and capabilities in this growth market. In addition, Globecomm will benefit from Speedcast's scale and capabilities in the Maritime and Enterprise sectors.
"The acquisition of Globecomm fits perfectly with Speedcast's strategy to build competitive advantages based on scale, reach and unique capabilities. Globecomm is particularly complementary as it significantly strengthens our Government division at a time when government spending globally is expected to rise. Globecomm also has a strong reputation providing remote communications and professional services to key customers in Maritime and Enterprise and will strengthen our innovation capabilities with new solutions and strong engineering expertise in growth areas such as IoT, wireless and media services" said Speedcast CEO Pierre-Jean Beylier. "I am excited about the growth opportunities created by the combination of our two companies. I welcome the Globecomm team to Speedcast and look forward to their contribution to our journey. I welcome Globecomm customers and I am confident they will find benefits from all the additional capabilities and resources our Group can offer."
Speedcast is very confident of achieving a targeted US$15 million in annual cost synergies within 18 months of completing the acquisition, as communicated previously. The cost synergies are expected to be generated across the business, including through footprint rationalisation, network improvements and improved procurement.
As previously announced, in connection with closing the acquisition, Speedcast completed a US$175 million incremental term loan add-on to its existing US$425 million US Term Loan B facility (due 2025). The proceeds from the term loan add-on were used to fund the acquisition consideration, pay fees and transaction expenses and repay a portion of the outstanding loans under the company's revolving credit facility.
The only financial covenant in the company's debt facilities is a requirement to maintain net leverage1 at or below 4.0x EBITDA. In addition, the covenant only applies if the revolving credit facility is more than 35% drawn. Speedcast's net leverage as at June 30, 2018 pro forma for the transaction was 3.4x EBITDA.
The table in link below sets out a summary of the key terms of Speedcast's seven year Senior Secured Credit Facility on completion of the acquisition.
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For more information about Speedcast, please visit http://www.speedcast.com
About Speedcast International Ltd
Speedcast International Ltd (ASX:SDA) is the world's largest remote communications and IT services provider. The company delivers critical communications solutions through its multi-access technology, multi-band and multi-orbit network of 80+ satellites and an interconnecting global terrestrial network, bolstered by extensive local support from 40+ countries. Speedcast is uniquely positioned as a strategic partner, tailoring communications, IT and digital solutions to meet customer needs and enable business transformation. The company provides managed information services with differentiated technology offerings, including cybersecurity, crew welfare, content solutions, data and voice applications, IoT solutions and network systems integration services. With a passionate customer focus and a strong safety culture, Speedcast serves more than 3,200 customers in over 140 countries in sectors such as Maritime, Energy, Mining, Enterprise, Media, Cruise, Humanitarian and Government. Learn more at Speedcast.
Speedcast International Ltd