In-flight broadband and content provider Global Eagle Entertainment is to undertake an additional share offering that could raise up to US$183.3m. The company will issue 11.6 million shares of common stock at US$14.25 per share raising US$159.4m. The…
In-flight broadband and content provider Global Eagle Entertainment is to undertake an additional share offering that could raise up to US$183.3m.
The company will issue 11.6 million shares of common stock at US$14.25 per share raising US$159.4m. The underwriters, led by sole book-running manager Piper Jaffray & Co, have an over allotment option to acquire a further 1.74 million shares.
Global Eagle said that net proceeds are to be used for general corporate purposes, including repaying the US$19m 12% convertible unsecured promissory note previously issued to its majority shareholder PAR Investment Partners. The 60-day note was offered in October to help fund Global Eagle’s US$36m acquisition of in-flight entertainment services provider IFE Services Limited.
That deal was Global Eagle’s second purchase since its formation at the beginning of 2013 and the company stated that the remainder of the proceeds might be used to fund more acquisitions.
In its offering prospectus, Global Eagle stated: “One of our core strategies is to seek to supplement our organic growth and marketing and internal product development efforts with strategic acquisitions that add new customers and/or capabilities or help us expand in our current markets or enter additional complementary markets, and we are in regular discussions to explore the possibility of such acquisitions.
“The potential acquisitions which we are currently exploring include smaller add-on acquisitions, as well as larger industry consolidations in which the purchase price we may pay could equal more than the amount we raise in this offering.”
The share issue may also be used for the company’s ongoing warrant purchase agreements. On 22 and 26 November and 4 December, Global Eagle entered into agreements with holders of warrants to issue an aggregate of almost 900,000 shares of common stock in exchange for the surrender of warrants to purchase more than 2.9 million shares.
Contemporaneous to the public offering, one of Global Eagle’s institutional stockholders has indicated an interest in purchasing approximately US$50m of shares of Global Eagle capital stock. This would include both shares of common stock in the announced public offering as well as shares of non-voting common stock directly from Global Eagle in a private placement. The company, though, did point out that this indication of interest is not a binding agreement or commitment.
Dougherty & Company and Imperial Capital are acting as co-managers for the public offering with McDermott Will & Emery providing legal advice.
Seeks to squeeze out AIA minority shareholders
Global Eagle is finally close to taking full control of German in-flight entertainment solutions firm Advanced Inflight Alliance.
Alongside satellite-based in-flight broadband service provider Row 44, AIA was the central part of the US$430m merger and acquisition that formed Global Eagle at the beginning of 2013.
That deal saw Global Eagle purchase the entirety of US private equity firm PAR Capital Management’s 86% stake in AIA in return for around 14.37 million new shares of non-voting Golden Eagle common stock. The remaining 14% was held as free-float trading on the Frankfurt Stock Exchange.
Since then, Global Eagle has upped its stake to 94% and in July, commenced a process under German law to acquire the remaining 6%.
On 13 December, Global Eagle’s German subsidiary Global Entertainment AG made a request for an AIA shareholder meeting to resolve the transfer of the remaining shares to Global Eagle at a cash compensation price of €7.35 per share. As of 13 December, AIA’s share price was €5.85.
The shareholder meeting is expected to take place on 21 February 2014.
