UK-based private equity group Permira has acquired a majority stake in Asian satellite operator Asia Broadcast Satellite (ABS) in a deal believed to be in the region of US$200m. The transaction was entirely equity funded.
Permira, which has experience…
UK-based private equity group Permira has acquired a majority stake in Asian satellite operator Asia Broadcast Satellite (ABS) in a deal believed to be in the region of US$200m. The transaction was entirely equity funded.
Permira, which has experience in the satellite sector having invested in both Inmarsat and Intelsat, acquired ABS’ holding company Kingsbridge Limited from majority shareholder and part-founder Citi Venture Capital International (CVCI), as well as ADM Capital and certain other shareholders in a share purchase agreement dated September 9, 2010.
As SatelliteFinance reported last month, ABS and CVCI have contacted a number of sponsors over the past couple of months with a view to a sale. The book was not sent to any strategic players as the existing ABS management is understood to have wanted to remain in charge. Indeed, management continues to hold a minority stake in the company. Citigroup has been running the sales process.
According to a number of SatelliteFinance sources, former PanAmSat and Intelsat chief operating officer Jim Frownfelter has been involved with Permira on the purchase and may take up an executive position at ABS.
Commenting on the acquisition, Richard Sanders, head of TMT at Permira, said: “ABS is one of the world’s fastest growing satellite operators, with prime orbital locations serving markets with strong fundamentals. Tom Choi and his team have achieved a tremendous amount in the past four years from start-up and, with the Permira funds’ backing, have the opportunity to continue growing in their target markets in Asia, Russia, Africa and the Middle East.” The key driver to this future international growth is the planned ABS-2 satellite, particularly as the company’s five in-orbit satellites are all more than 10 years old. At the recent World Satellite Business Week conference in Paris, ABS founder and CEO Tom Choi said that the financing for the new satellite was almost complete.
Choi said that the satellite, which is to be constructed by Space Systems Loral and is scheduled to be launched in early 2013, will cost US$320m, a third of which will be paid for out of the ABS’ existing cash flow. Just over US$150m of the satellite has been raised via a condosat agreement with two Asian telecoms operators, including Korea Telecom. This deal sees ABS pre-sell transponders on the forthcoming spacecraft.
The remaining cost, around US$50m, is expected to be raised via debt financing.
