Home / M&A Activity / Iridium & NAV CANADA Complete Agreement for Air Traffic Joint Venture; Matt Desch Comments

Iridium & NAV CANADA Complete Agreement for Air Traffic Joint Venture; Matt Desch Comments

Iridium CEO Matt Desch

Iridium Communications Inc. (Nasdaq: IRDM) has finalized an agreement with NAV CANADA regarding their global air traffic joint venture, Aireon LLC, according to an Iridium statement.

“I am excited about the opportunities (Aireon) will present for Iridium, NAV CANADA and other air navigation service providers who may choose to collaborate with us, ” said Iridium CEO Matt Desch.

The agreement calls for NAV CANADA to invest a total of up to $150 million, to be made in five installments and subject to the satisfaction of various operational, commercial, regulatory and financial conditions.

NAV CANADA made a $15 million payment for the first installment, representing 5.1 percent of Aireon’s fully diluted equity, on Nov. 19. The last tranche is scheduled late in 2017.

NAV CANADA’s membership interest could ultimately represent up to 51 percent of Aireon’s fully diluted equity and Iridium would retain 49% ownership in Aireon if NAV CANADA fully funds.

Aireon is expected to generate approximately $200 million in one-time hosting fees for the integration and launch of the payloads between 2014 and 2017.

“NAV CANADA is ideally suited to be a partner in Aireon because of the important role they play in providing air navigation services to some of the busiest oceanic airspace in the world, ” said Don Thoma,  Aireon president and CEO.

Iridium expects to receive additional annual data fee revenue, subject to Aireon’s ability to successfully negotiate customer agreements with other air navigation service providers.

Aireon will work to enable air traffic management agencies worldwide to continuously track aircraft anywhere in the world by leveraging Iridium NEXT, a next-generation constellation of 66 cross-linked Low Earth Orbit satellites.

The effort will provide NAV CANADA with enhanced services and is meant to make commercial airline operations more efficient, safer and more environmentally friendly.

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