TMT entrepreneur David McCourt is on the lookout for more VSAT M&A after taking over British antenna specialist Skyware Technologies (SWT) last year. McCourt said his private equity firm Granahan McCourt Capital is open for more opportunities to consolidate and create scale in the fragmented market.
TMT entrepreneur David McCourt is on the lookout for more VSAT M&A after taking over British antenna specialist Skyware Technologies (SWT) last year.
McCourt, who describes satellite technology as “the most underappreciated opportunity in the next phase of telecom”, said his private equity firm Granahan McCourt Capital is open for more opportunities to consolidate and create scale in the fragmented market.
“The MENA region is one market in particular where we see potential, as there is huge demand coming from this region being driven by the launch of new high-throughput satellites, and the lack of existing communications infrastructure make it particularly appealing,” he told SatelliteFinance.
GMC has outlined plans to grow SWT by more than 30% over each of the next few years. The PE firm typically uses one or two turns of debt in all its portfolio businesses and, although McCourt said this will likely continue with SWT, he stressed that the bulk of its growth will likely come from organically produced cash flow.
Manchester-headquartered SWT has around 30 employees across Europe, North America and Asia, and hundreds of contract staff.
GMC bought the group in an all-cash deal after it was spun off from Skyware Global, which shifted its focus towards the North American antenna market. SWT focuses on the more sophisticated global terminal and electronics business.
GMC was a major shareholder of Skyware Global, having been one of the architects of a deal that formed the company back in 2009, through merging three manufacturing and supply companies.
In June 2015, Global Invacom of the UK bought Skyware Global in a deal that made it the world’s largest satcoms equipment manufacturer.
Skyware Global was the operating entity of Satellite Holdings, a vehicle GMC created in partnership with other private equity funds and also sees McCourt as chairman and CEO.
McCourt was raised in Massachusetts and created his first company in 1982 with McCourt Cable Systems, whose cable laying methods would later become the industry standard. He has founded or bought more than 20 companies in nine countries over the last 30 years.
“We have bought Skyware Technologies because it fits in perfectly with Granahan McCourt’s vision of how the needs of under-served parts of the world will be met through boldness and innovation in design, manufacture and on-the-ground implementation of satellite technology,” he said.
McCourt believes the satcoms market is tipped for “tremendous growth” in the coming years, as it becomes an increasing focus for both the public and private sectors across the world’s developing markets.
“In many of the world’s developing areas it will never make sense to build fibre or other in-ground, capex intensive networks,” he said.
“The population densities are too distributed and the payback periods too long. However, the people in these communities still want fast and reliable connectivity, and that want is quickly becoming a need. Satellite is the only logical and viable solution for these areas.”
According to McCourt, growth will be driven by three intertwined shifts in the market: the increasing importance of connectivity, satellite technology advances such as HTS, and satcoms becoming increasingly affordable for the end user.
“It’s extremely rare to see this sort of shift in the dynamics of an entire industry so it’s hard for us to describe just how excited we are about this business and the industry as a whole,” he said.