Satellite company SES has been cleared to acquire the remaining shares and warrants of O3b Networks, for $730 million.
SES will increase its ownership stake in O3b from 49.1% to 100%, using proceeds from the company’s recent equity raising. The other shareholders have agreed to accept the SES offer, non-tendering warrant holders will be cashed out, and the completion of the transaction is expected on 1 August 2016.
On completion, SES will consolidate $1.2 billion of O3b net debt and will refinance a significant proportion of the most expensive debt facilities, using the proceeds secured by the recent hybrid bond issuance and the remaining proceeds from the equity raising.
O3b’s high-throughput, low-latency solution expands SES’s reach into data-centric verticals.
“Moving to 100% of O3b will be highly accretive for SES, both from a strategic and economic standpoint,” Karim Michel Sabbagh, president and CEO of SES. “In addition to exceeding SES’s investment hurdle rates, full consolidation accelerates the delivery of important transformational and combinational synergies that are only possible with 100% ownership.”
Padraig McCarthy, CFO of SES, added: “The acquisition of O3b – the fastest growing satellite network – significantly enhances SES’s long-term growth profile, with the constellation expected to generate annualised revenues of between $32 million and $36 million per satellite at steady-state. Looking forward, both SES and O3b will benefit from the strong synergies and strategic fit across both businesses.”
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