M&A September 30, 2024 1:48:40 pm

Gogo to acquire Satcom Direct in deal that could top $600M

By Lucas High

BROOMFIELD — Gogo Inc. (Nasdaq: GOGO), a Broomfield-based provider of broadband connectivity services for the business aviation market, has an agreement in place to buy Satcom Direct Inc., a Melbourne, Florida-based in-flight communications company, in a deal that could be worth more than $600 million.

“Under the terms of the agreement, Satcom Direct will receive $375 million in cash and five million shares of Gogo stock at closing, and up to an additional $225 million in payments tied to realizing certain performance thresholds over the next four years,” Gogo said in a Monday news release.

Gogo’s stock price opened trading on Monday at $7.46.

“This transaction accelerates our growth strategies of expanding our total addressable market to include the 14,000 business aircraft outside North America, and delivering solutions that meet the needs of every segment of the BA (business aviation) market,” Gogo CEO Oakleigh Thorne said in a prepared statement. “Together, Gogo and Satcom Direct will offer integrated GEO-LEO satellite solutions that provide the highest performance of any satellite solution, along with the world-class customer support that the global heavy jet segment demands.”

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Gogo reported this week that it expects Satcom Direct to generate about $485 million in 2024 sales.

“This transaction also uniquely positions us to sell our Galileo LEO solution integrated into Satcom Direct’s GEO and L-band offerings as part of a multi-band, multi-orbit solution for the fast-growing military/government mobility market,” Thorne’s statement said.

The deal, which will be paid for with a combination of cash, stock and $275 million in new debt, is expected to result in “$25-30 million in annual run-rate cost synergies in the two years following closing,” Gogo said.Gogo, which last month (prior to the Satcom Direct deal reveal) dropped its fiscal 2024 revenue-guidance range from $410 million-$425 million to $400 million-$410 million, anticipates that the acquisition will close in late 2024.

Gogo Inc. (Nasdaq: GOGO), a Broomfield-based provider of broadband connectivity services for the business aviation market, has an agreement in place to buy Satcom Direct Inc., a Melbourne, Florida-based in-flight communications company, in a deal that could be worth more than $600 million.