In-flight broadband and entertainment provider Global Eagle Entertainment has made its first acquisition since its formation earlier this year. The company has purchased digital video production and content delivery specialist Post Modern Group for up to…
In-flight broadband and entertainment provider Global Eagle Entertainment has made its first acquisition since its formation earlier this year. The company has purchased digital video production and content delivery specialist Post Modern Group for up to US$23.9m in cash and stock.
Under the terms of the purchase agreement, Global Eagle will initially pay US$10.5m in cash, US$5m in common stock (515,464 shares at US$9.70 per share) and repay all of PMG’s outstanding debt obligations to Union Bank. An additional cash consideration of up to US$5m will be paid based on PMG achieving certain EBITDA thresholds over the next couple of years.
Global Eagle stated that the transaction was in line with its strategic plan of consolidating the top content and distribution companies serving the in-flight and maritime markets.
Founded in 1993, PMG currently serves a customer base of over 10 motion picture and television distributors and 50 airlines and cruise lines. The company is expected to generate over US$35m in revenues and in excess of US$4.5m in adjusted EBITDA in 2013.
Commenting on the deal, Global Eagle CEO John LaValle stated: “This is a highly complementary and accretive transaction that will strengthen our technology and breadth of services, increase our customer base and provide us with entry into the cruise line industry.
“The expansion of our studio relationships and content resources for both embedded in-flight entertainment systems and our own satellite-based internet connectivity system further reinforces our ability to serve the worldwide airline market with the most complete platform available.”
The acquisition, which has been approved by Global Eagle’s board of directors, is anticipated to close in the third quarter of 2013.
Global Eagle Entertainment was formed by the US$430m merger of satellite-based in-flight broadband service provider Row 44 and German in-flight entertainment solutions firm Advanced Inflight Alliance.
Media veterans Harry Sloan, the former CEO and chairman of MGM prior to its bankruptcy, and Jeff Sagansky, previously the president of CBS entertainment, formed a special purpose acquisition company called Global Eagle Acquisition Corp in May 2011. In November 2012, the SPAC revealed its plan to buy both Row 44 and AIA as it sought to develop a dominant player in the in-flight entertainment market.
