Hong Kong-based satcoms firm SpeedCast (ASE:SDA) has acquired European L-band services specialist SAIT Communications in a US$21.7m deal.
SAIT focuses on the maritime market, particularly in Greece and Cyprus, and is the latest target to come under private equity-backed SpeedCast’s aggressive inorganic growth strategy.
Hong Kong-based satcoms firm SpeedCast (ASE:SDA) has acquired European L-band services specialist SAIT Communications in a US$21.7m deal.
SAIT focuses on the maritime market, particularly in Greece and Cyprus, and is the latest target to come under private equity-backed SpeedCast’s aggressive inorganic growth strategy.
SpeedCast said the deal gives it a strong foothold in southern Europe’s shipping sector to meet growing demand for L-band services.
“With this acquisition, we are expanding our presence in major and fast growing maritime markets in southern Europe,” SpeedCast CEO Pierre-Jean Beylier said.
“These low VSAT-penetrated markets are well positioned for accelerated growth.”
SAIT has been an active player in the maritime communications sector for nearly 10 years but has only recently started providing VSAT broadband. It services about 2,500 ships in total, and has been able to roll out Inmarsat’s Fleet Broadband product to close to 1,500 vessels over the past few years.
The combined group will supply more than 5,000 vessels with a broad range of communications and IT solutions, making it one of the largest service providers in the maritime sector.
SpeedCast agreed to pay an initial US$14.2m for the group, comprising US$13.8m in cash to be financed with debt and US$0.4m in new SpeedCast shares.
It could pay up to US$7.5m more in H1 2017 based on FY 2016 growth targets. A third of any additional consideration will be paid in cash, with the rest coming from new SpeedCast shares.
The group has increased its committed debt facilities with existing lenders by a further US$15m to help fund the deal, which it expects to close in the next few days.
It expects pro forma leverage to be 2.9-3.0 times after the acquisition, although it anticipates returning to its 1.75-2.25 goal within 12-18 months through strong operating cash flows and earnings growth.
SpeedCast has made nine acquisitions in the fragmented satcoms sector since TA Associates acquired it in late 2012.
Its latest deal was announced earlier this month, when the group agreed to buy failed Australian satellite operator NewSat’s teleport and services assets for about US$9m.