The transaction is valued at $7.3 billion, with Viasat using $850 million in cash, approximately 46 million of its shares (valued at $3.1 billion) and the assumption of $3.4 billion of net debt.
The combination will result in spectrum licenses across the Ka-, L- and S-bands and a fleet of 19 satellites in service with an additional 10 spacecraft under construction and planned for launch within the next three years.
Multi-band, multi-orbit
The official announcement of the deal states:
“The combined company intends to integrate the spectrum, satellite and terrestrial assets of both companies into a global high-capacity hybrid space and terrestrial network, capable of delivering superior services in fast-growing commercial and government sectors. This advanced architecture will create a framework incorporating the most favorable characteristics of multi-band, multi-orbit satellites and terrestrial air-to-ground systems that can deliver higher speeds, more bandwidth, greater density of bandwidth at high demand locations like airport and shipping hubs and lower latency at lower cost than either company could provide alone.”
According to the companies, the deal will unlock “greater value” from Inmarsat’s L-band spectrum and existing space assets by using Viasat’s beamforming, end-user terminal and payload technologies and its hybrid multi-orbit space-terrestrial networking capabilities.
“Joining with Viasat is the right combination for Inmarsat at the right time,” said Suri. “Viasat is a terrific innovator and Inmarsat brings some powerful additions: global reach, a broad distribution channel, robust business momentum and a presence in highly attractive global mobility segments. Together, the two companies will create a new global player with the scale and scope to help shape the future of a dynamic and growing industry.”
The combination will create a strong future for Inmarsat and be well-positioned to offer greater choice for customers around the world, enhanced scope for partners and new opportunities for employees. The industrial logic is compelling and ensures that the U.K. has a strong and sustainable presence in the critical space sector for the long term.”
The deal has been unanimously approved by both the boards of directors.
In terms of personnel, Andrew Sukawaty – the current chairman of Inmarsat – will be appointed as one of two new Viasat board members. Other decisions regarding the management of the combined company, however, will be made later.
Viasat IoT
“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.”
The acquisition is expected to be completed in the second half of 2022, subject to regulatory approval and a green light from Viasat shareholders.
Silicon Roundabout Orchestra
In August 2021, Inmarsat unveiled its proposed new satellite constellation, dubbed Orchestra. Describing it as a “communications network of the future”, Orchestra was planned to bring together Inmarsat’s existing geosynchronous (GEO) satellites with low earth orbit satellites (LEO) and terrestrial 5G into an integrated system.
As part of its development, the company has been planning to add 150 to 170 satellites to its existing fleet, investing $100 million over the coming five years.
Also that month, it was reported that Inmarsat would be leaving its location in Shoreditch (pictured above), on the so-called Silicon Roundabout, to move to a City HQ.
See also: Inmarsat takes on Dutch government over 5G spectrum allocation