US-based satellite imagery operators GeoEye and DigitalGlobe have received shareholder approval for their transformational US$900m merger.
The approval puts the transaction on track to close in early 2013, although it still requires the nod from the…
US-based satellite imagery operators GeoEye and DigitalGlobe have received shareholder approval for their transformational US$900m merger.
The approval puts the transaction on track to close in early 2013, although it still requires the nod from the Department of Justice, the Federal Communications Commission and the National Oceanic and Atmospheric Administration.
The deal was announced in July after months of merger talks that at one point saw DigitalGlobe reject an unsolicited takeover offer from GeoEye. Under the current plan, DigitalGlobe shareholders will own around 64% of the enlarged entity, which will take its name, with GeoEye’s owners holding the remaining 36%.
DigitalGlobe said that 100% of its shares that voted during a special meeting yesterday were in favour of the proposal, representing around 87% of its common stock. During a meeting held on the same day, 98.3% of GeoEye shares voting on the plan were in favour of it, representing roughly 77.2% of its outstanding common stock.
The merger plan gives GeoEye shareholders a number of options over the deal’s composition. They have the right to elect for either 1.137 shares of DigitalGlobe’s common stock and US$4.10 per share in cash; 100% of the consideration in cash, which is equivalent to US$20.27, or 100% of the consideration in stock, equivalent to 1.425 shares of DigitalGlobe common stock, for each share of GeoEye stock they own. This represents a valuation multiple of around five times GeoEye’s EV / FY2011 EBITDA.
DigitalGlobe is financing the deal with a US$1.2bn facility from Morgan Stanley and Bank of Tokyo-Mitsubishi UFJ, which will refinance the merged group’s outstanding debt. It has also increased its revolving credit facility by US$50m to US$150m to give the combined company extra flexibility.
Morgan Stanley and Barclays are financially advising DigitalGlobe, with Skadden, Arps, Slate, Meagher & Flom 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.
The merger would bring together the two largest imagery operators in the US, helping them tackle the expected reduction in government spending on the EnhancedView programme that funds them.
