DigitalGlobe’s largest shareholder, Morgan Stanley Principal Investments, is to sell just under half its stake in the earth imaging operator, in a deal that will see it raise up to US$208.7m.
The sale will take the form of a secondary offering of 6…
DigitalGlobe’s largest shareholder, Morgan Stanley Principal Investments, is to sell just under half its stake in the earth imaging operator, in a deal that will see it raise up to US$208.7m.
The sale will take the form of a secondary offering of 6 million shares held by Morgan Stanley with the underwriters having a 30-day overallotment option to purchase up to an additional 900,000 shares. The shares were priced on 15 September 2010 at a public offering price of US$30.25 per share.
Morgan Stanley currently owns 31.3% of DigitalGlobe, or 14.37 million shares. Following the offering, this holding will fall to 18.3%, 8.37 million shares, or if the overallotment is fully taken up, to 16.3%,7.47 million shares.
Morgan Stanley and JP Morgan are joint book-running managers for the offering, with Citigroup and Canaccord Genuity co-managers. Dougherty & Company and Merriman Capital are the selected dealers in connection with the offering.
Under the terms of Morgan Stanley’s existing investor agreement with DigitalGlobe, the former currently has the right to designate for nomination five of the nine DigitalGlobe board of directors, at least three of which must be independent. Following the share sale, this will reduce to three of the nine board members, all of whom must be independent.
One banker told SatelliteFinance that the timing of the sale is likely linked to the signing of the US$3.55bn ten-year Enhanced View Program contract with the US National Geospatial-Intelligence Agency in early August. That deal prompted a spike in DigitalGlobe’s share price as the market reacted positively to the steady revenue streams that the contract would bring.
Another reason may be that since its IPO in May 2009, DigitalGlobe has followed a policy of not paying any cash dividends and has stated that it does not anticipate paying in the foreseeable future as it seeks to retain its earnings to help expand its business.
