Luxembourg-based communications satellite operator SES has exercised a call option to acquire the remaining 50.9 percent stake in Channel Islands-based satellite broadband services provider O3b Networks through an estimated $730 million deal with other O3b shareholders.
SES said Monday it will use money the company raised during a recent equity financing event to fund the transaction and expects to complete its acquisition of O3b Networks by August 1.
“Moving to 100 percent of O3b will be highly accretive for SES, both from a strategic and economic standpoint, ” noted SES President and CEO Karim Michel Sabbagh.
“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 percent ownership, ” Sabbagh added.
SES also seeks to consolidate about $1.2 billion of O3b’s net debt once the deal completes as well as refinance a significant proportion of the O3b’s expensive debt facilities with hybrid bonds and venture capital funds.
The combination will allow SES to expand its global footprint and portfolio of satellite-based service offerings in data-centric vertical markets, the company noted.
SES estimates it will generate approximately $58.7 million in commercial, product development, financial and operational synergies over the next year as a result of the acquisition and expects the amount to reach $117.3 million by 2021.