Inmarsat has won the bidding process for Norwegian VSAT provider Ship Equip. The MSS operator will pay a total consideration of US$159.5m, which is to be financed from current available liquidity.
Ship Equip is to be acquired by Inmarsat Solutions…
Inmarsat has won the bidding process for Norwegian VSAT provider Ship Equip. The MSS operator will pay a total consideration of US$159.5m, which is to be financed from current available liquidity.
Ship Equip is to be acquired by Inmarsat Solutions Limited and will operate as a separate subsidiary alongside the Stratos and Segovia businesses. The transaction is expected to close in the next couple of weeks.
As SatelliteFinance exclusively reported back in late 2010, Ship Equip mandated UBS to look into strategic options for the company including a potential sale. Initial bids were due on 17 December with interest understood to have come from the likes of MTN SeaMobile and RigNet. However, by the time final bids were due in the week beginning 7 March, only three parties remained in the process – Inmarsat, Vizada and a Norwegian private equity firm. Inmarsat is believed to have been a late entrant to the auction.
The strategy behind the acquisition centres on Inmarsat seeking to bolster its maritime communications business prior to the launch of its next generation Ka-band constellation Global Xpress in 2014.
Commenting on the transaction, James Parm, president and CEO of Stratos, said: “Ship Equip is the perfect partner for Inmarsat, bringing a large installed base of maritime VSAT customers, who we expect to be in the forefront of the transition to Global Xpress services, and a management team with extensive knowledge of VSAT operations and customers, to help us ensure that Global Xpress is a compelling proposition for the maritime community. This acquisition demonstrates our clear determination to prepare the way for a fast and successful take up of Ka-band services via Inmarsat Global Xpress.”
While the purchase price represents a multiple of around 15 times Ship Equip’s estimated fiscal 2010 EBITDA of NKr64m (US$10.6m), as compared to the 9.5x EBIDTA Harris paid for CapRock, the Norwegian company is predicting a rapid rise in revenues over the next couple of years as the VSAT maritime communications market matures. To that end, Ship Equip’s 2014 EBITDA is forecast to be NKr300m (US$50m).
Ship Equip was established as a satellite TV provider in the early 1990s, before expanding to the maritime sector. It focuses on the lucrative international commercial shipping market with more than 850 vessels including oil/gas offshore support vessels (OSVs), tankers, freighters and commercial fishing boats currently utilising the company’s VSAT system. Last year, the company established two new Network Operations Centers (NOC) in Houston and Singapore.