Inmarsat to go private in $3.4 billion PE-led buyout deal

A private equity-led consortium has opted to acquire Inmarsat for $3.4 billion in cash in a deal that will see the British satellite operator taken private.

The news come after the satellite company rejected a lower offer from its US-based rival EchoStar last year.

The consortium of private equity firms includes UK-based Apax Partners, US-based Warburg Pincus, Canada Pension Plan Investment Board (CPPIB) and Ontario Teachers Pension Plan Board.

Private equity-led offer sends Inmarsat’s share price higher

Based on the offer, Inmarsat’s shareholders will receive $7.21 cash or 546p per share, with the news of the offer helping to send the company’s stock 8.5% higher to 549p on Monday morning.

The deal, which still requires approval from the UK Competition and Markets Authority (CMA), is expected to come under heavy scrutiny from British regulators due to the company’s position as a strategic asset.

Inmarsat is a longstanding provider of satellite telecommunication services to the shipping industry and has grown its presence significantly within commercial in-flight broadband.

Deal secures majority shareholder support

The consortium announced that it received support for its bid from Inmarsat’s top shareholder Lansdowne Partners, which controls a 11.4% stake in the business.

The consortium’s bid, which was made in late-January, comes shortly after Inmarsat rejected a $3.25 billion offer from its US-based rival EchoStar.

Inmarsat has struggled as a business in recent following major losses in its maritime business – which equates to a 41% share of total sales – due to increased competition, applying downward pressure on the company’s revenues.