US satellite imagery firms DigitalGlobe and GeoEye have completed their US$900m transformational merger and associated financings.
The companies announced on 31 January that they had received the regulatory nod to create a combined company that has a…
US satellite imagery firms DigitalGlobe and GeoEye have completed their US$900m transformational merger and associated financings.
The companies announced on 31 January that they had received the regulatory nod to create a combined company that has a market capitalisation of US$2.1bn.
At the same time, the group secured new senior secured credit facilities worth US$700m. This comprises a seven-year US$550m term loan and as yet undrawn revolving credit facility worth US$150m.
The term loan will bear interest at either an adjusted LIBOR rate plus a margin of 2.75%, or a base rate plus 1.75%. If the company’s leverage ratio is less than or equal to 2.5 times, then there is a step down to 2.50% for adjusted LIBOR calculations or 1.50% for the base rate. The margins associated with the revolver are also subject to the company’s leverage ratio, up to a maximum of 2.50%.
In an SEC filing, the company said it will also pay a quarterly commitment fee of 37.5-50 basis points on the average daily unused amount of the revolver, based on its leverage ratio from time to time.
Citigroup is listed as joint lead arranger and joint lead bookrunner for the facility, with JP Morgan as administrative and collateral agent, Morgan Stanley as syndication agent, and The Bank of Tokyo Mitsubishi UFJ and Citigroup as documentation agents.
The company has also priced a US$600m senior 8-year bond offering at par. The notes carry a coupon of 5.52% and was sold via a private placement. The size of the issue was increased by US$100m following strong demand.
US Bank National Association was trustee for the notes, and DigitalGlobe said Morgan Stanley represented the initial purchasers.
DigitalGlobe has previously stated that proceeds from both the notes and the bank debt, together with cash on hand, would be used to pay the cash consideration of the GeoEye acquisition, refinance DigitalGlobe’s existing credit facility and fund the discharge and redemption of all of GeoEye’s outstanding US$400m 9.625% senior secured notes due 2015, and US$125m 8.625% senior secured notes due 2016
Announcing the completion of the merger, Jeffrey Tarr, DigitalGlobe’s CEO, said: “With a stronger financial profile, more robust suite of services, and among the world’s most advanced geospatial production and analysis capabilities, we will be even better positioned to meet customers’ needs and create value for shareowners.
“Together, we are poised to achieve our vision of being the leading source of information about our changing planet.”
Morgan Stanley and Barclays are financially advising DigitalGlobe on the merger, with Skadden, Arps, Slate, Meagher & Flom are providing legal advice. Goldman Sachs, Convergence Advisers and Stone Key Partners are serving as GeoEye’s financial advisers, and Latham & Watkins and Kirkland & Ellis are its legal advisers.