Convergencia Research, Consultoría especializada en Latinoamérica y Caribe
Tuesday, November 09, 2021

Consolidation in the satellite sector

Viasat buys Inmarsat for US$ 7.3 billion

Once the transaction is carried out, Viasat will have a total fleet of 19 satellites in Ka, L and S bands, and ten new devices that will be added in the next three years. Inmarsat thus concludes a stage of profound changes in its leadership and strategy. The integration of Inmarsat will strengthen Viasat in the government and maritime sectors.

The integration of Inmarsat by Viasat will result in an operator with a presence in fixed and mobile segments, IoT services, broadband and a broad terrestrial base. The combined company will have satellites in the Ka, L and S bands, a total of 19 devices in orbit today and 10 to come in three years. It is projected that by 2021 it will have joint revenues of US$ 4.1 billion (US$ 1.3 billion from Inmarsat and US$ 2.8 billion from Viasat) and 8,000 employees.

The transaction entails US$ 850 million in cash, 46.36 million Viasat shares valued at US$ 3.1 billion, and a net debt of US$ 3.4 billion. It is expected to be approved in the second half of 2022.

For Rajeev Suri, current Inmarsat CEO, the operation is "the right combination at the right time." And he analyzed, on the state of the industry: “It is clear that the satellite market is entering a new era, when it comes to market demands. This agreement offers scale to deal with that.”

According to Viasat Executive President Mark Dankberg, the market potential of both companies will go from $ 985 billion in 2020 to US$ 1.6 trillion in 2030. if we consider the final consumer market for 2030, it would amount to US$ 900 billion. In particular, the integration of Inmarsat will strengthen Viasat in the government and maritime sectors.

Remezón in Inmarsat. Yesterday's announcement follows a period of profound changes at Inmarsat. Eight months ago, its CEO Rubert Pearce was replaced by former Nokia Rajeev Suri, among other executive renewals in the areas of aviation, maritime, among others.

Inmarsat had also announced the creation of a new constellation in LEO called Orchestra, with a US$ 100 million investment. In August, this plan of 200 satellites, built and launched between 2025 and 2030, was announced. The fleet aimed to complement the other assets of the satellite operator in GEO, to better serve the mobility sector. The investment figure was projected for the first five years of the project, through 2026.

 

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