Speedcast International has signed a definitive agreement for a potential $100 million acquisition of UltiSat in efforts to establish a new government division and build on existing remote communications offerings to the public sector.
Speedcast said Sunday the pending transaction with the U.S. government contractor is anticipated to complement the Speedcast portfolio for governments, nongovernment organizations and international government organizations in Australia, Asia, Europe and Latin America.
“The acquisition of UltiSat extends Speedcast’s position serving government and NGO customers, at a time when we expect government spending to rise,” said Speedcast CEO Pierre-Jean Beylier.
The company added the amount of the proposed acquisition is payable to UltiSat over two years and subject to financial performance, regulatory approvals and other customary closing conditions.
The deal would follow Speedcast’s $425 million acquisition of Harris‘ (NYSE: HRS) former CapRock Communications business, which provided managed satellite, wireless and terrestrial communications services to the cruise and energy sectors.
UltiSat CEO Mohammed Abutaleb is in line to head the future government division of Speedcast that will seek to deliver communications and professional services to government, NGO and IGO customers with a goal toward growth in the $5 billion government and military satellite communications market.
The companies aim to close the deal in the fourth quarter of 2017.
Goodwin Procter and Deloitte serve as advisers to Speedcast, while Pillsbury Winthrop Shaw Pittman and Trinity Advisers are working with UltiSat on the transaction.