Satellite service provider Intelsat agreed to acquire the commercial aviation unit of in-flight Wi-Fi provider Gogo in a $400 million deal, arguing the move showed its strength and vision for the future despite its debt burden.
In a statement, Intelsat noted the takeover would “redefine the connectivity experience” by bringing together its global network and Gogo’s installed base of more than 3,000 aircraft, serving 21 commercial airlines.
“This transaction will combine Intelsat’s next-generation high throughput space assets with Gogo’s best-in-class 2Ku antenna”, the company said, adding the step would position it to provide “more cost-effective and advanced commercial aviation broadband connectivity services”.
Intelsat CEO Stephen Spengler said the takeover made “strong commercial sense”, as it provided “compelling strategic value for our stakeholders”.
The executive emphasised the company’s objective to grow “beyond satellite connectivity to expand into consumer-optimised managed services”.
Spengler said the move showcased the “strength of our underlying business, our vision for the future, the commitment of key Intelsat stakeholders and the momentum that we have maintained over the past several months” alongside its financial restructuring.
Intelsat filed for bankruptcy protection [1] in the US in May, in line with a broader financial restructure to cut its legacy debt burden.
To fund the Gogo acquisition, the company plans to use its debtor-in-possession (DIP) financing facility and cash on hand.
Finalisation of the deal is expected prior to the end of Q1 2021, subject to customary approvals and regulatory clearances.
[1] https://www.mobileworldlive.com/featured-content/top-three/intelsat-follows-oneweb-into-chapter-11
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