Maritime VSAT specialist KVH Industries has acquired maritime training firm Videotel for £28.7m (US$48.9m) in cash.
Headquartered in London, Videotel produces high-quality training films and e-Learning services for the commercial maritime…
Maritime VSAT specialist KVH Industries has acquired maritime training firm Videotel for £28.7m (US$48.9m) in cash.
Headquartered in London, Videotel produces high-quality training films and e-Learning services for the commercial maritime industry.
The company services over 11,000 vessels and reported 2013 revenues of £14m (US$24m), of which approximately 93% was recurring revenue from multi-year subscription-based services. During 2013, Videotel’s combined gross profit margin was around 73%, while its EBITDA margin was 33%.
Speaking on a conference call, Martin Kits van Heyningen, KVH’s chief executive officer, said: “The acquisition of Videotel aligns with our strategy to expand the range of subscription-based value-added services for crew entertainment and ship operations as part of our new IP-MobileCast offering.
“We believe that Videotel offers KVH another important differentiating service to offer our customers over our mini-VSAT broadband network. The content services KVH now owns include the media services added last year with our Headland Media acquisition and now the training services provided by Videotel. They are strong standalone services in their own right with excellent margins and sales growth driven by increasing industry regulations and significant underlying social and technological trends.
“All this content is delivered using the multicasting capabilities of IP-MobileCast, enabling us to deliver these files using unused satellite capacity through background transmissions. It will make value added services a profitable addition to our core mini-VSAT broadband service.”
KVH financed the transaction through US$14m of cash on hand and proceeds from a new US$80m senior credit facility.
The debt is split between a US$64m five-year term loan, paying between 1.5% and 2.25% over Libor, and a US$15m five-year revolver.
Alongside funding the acquisition, KVH used a portion of the term loan to repay its US$30m of fixed debt.
Akin Gump Strauss Hauer & Feld acted as legal counsel to KVH on the transaction
