Speedcast International announced Thursday that the Committee on Foreign Investment in the United States (CFIUS) has approved the company’s $135M acquisition of Globecomm Systems. CFIUS found no unresolved national security concerns holding up the acquisition. Speedcast expects the purchase of Globecomm to finalize before the end of 2018, pending customary closing conditions.
On Aug 29th, GovConWire reported the Australian satellite communications company agreed to buy Globecomm Systems from Tennenbaum Capital Partners and HPS Investment Partners to expand across government, enterprise and maritime sectors. Speedcast anticipates the acquisition to save the company over $15M in annual operating costs within 18 months.
SpaceNews reported on Aug 28th that Speedcast acquiring Globecomm could double its revenue from government customers and position the company to earn larger defense contracts in the future. Nearly 50 percent of Globecomm’s revenue comes from government services and another 25 percent comes from maritime. After the deal is completed, maritime will account for 33 percent of Speedcast’s annual revenue.
“Horizontal consolidation in the maritime industry has been driven by the overcrowded market and the fallout from the oil downturn of several years ago, both of which have pressured industry revenue,” said Louie DiPalma, an equity analyst at William Blair.
Speedcast’s acquisition of Globecomm is the third sale of the company in five years. In 2013, the company sold itself to Wasserstein & Co. for $340M. The Manhattan-based firm eventually took Globecomm private before selling it themselves to HPS Investment Partners and Tennenbaum Capital Partners in 2017, according to Newsday. Speedcast is financing the acquisition through a loan of $425M to $600M from a credit facility that isn’t due until 2025, reports SpaceNews.