Published on: Jul 14, 2016
SES is expected to complete its acquisition of O3b networks on 1 August, after the company’s offer to acquire O3b Networks’ remaining shares and warrants has been accepted by O3b Networks shareholders.
The transaction will expand SES’s global reach and satellite-enabled solutions by consolidating O3b’s unique and global high throughput, low latency solution. The acquisition of O3b will augment SES’s differentiated capabilities in data-centric verticals and enhance SES’s foundations for sustainable growth.
SES expects to generate EUR 53 million of annual commercial, operational, product development and financial synergies in 2017. This will increase to EUR 106 million per year by 2021.
SES will pay USD 730 million to directly increase its fully diluted ownership of O3B from 49.1% to 100%. Once the transaction has been completed, SES will consolidate USD 1.2 billion of O3b net debt and refinance a significant proportion of O3b’s most expensive debt facilities. This will significantly reduce O3b’s average cost debt of 9.5%.
Karim Michel Sabbagh, President and CEO of SES, said that ‘Moving to 100% of O3b will be highly accretive for SES, both from a strategic and economic standpoint’, while Padraig McCarthy, CFO of SES added that the acquisition ‘significantly enhances SES’s long-term growth profile’.
‘Looking forward, both SES and O3b will benefit from the strong synergies and strategic fit across both businesses,’ McCarthy said.
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