Schlumberger’s sale of its Global Connectivity Services (GCS) business is gathering pace with five interested parties understood to have expressed an interest.
TelecomFinance sister publication SatelliteFinance has learnt that the potential bidders…
Schlumberger’s sale of its Global Connectivity Services (GCS) business is gathering pace with five interested parties understood to have expressed an interest.
TelecomFinance sister publication SatelliteFinance has learnt that the potential bidders include private equity firms Advent and Providence, sponsor-backed satellite communications services provider Vizada, global communications group Harris Corp and South African mobile operator MTN.
Management presentations took place this week with due diligence on the subsidiary set to be carried out in the next couple of weeks. A decision is then expected to be made in August. JPMorgan has been mandated to run the sales process.
While GCS only contributes approximately 1% of Schlumberger’s overall revenue, the global oilfield services company is believed to be seeking around US$300m for the unit. One banker close to the deal suggested that any bids would likely take the form of a leveraged buyout and even though the were a number of risk factors involved, such as GCS being a potentially difficult carve out for Schlumberger, the lack of valuable assets given its reseller business model and the potential for the likes of Inmarsat to take a significant chunk of the market, debt banks were comfortable providing financing for an acquisition.
GCS offers communications services for the oil and gas industry, connecting remote rigs and offices both terrestrially and via satellite. For the latter, GCS supplies custom engineered VSAT antenna systems connected via mobile satellite service operator Inmarsat’s constellation.
