INMARSAT, the global satellite communications specialist, yesterday said it was buying Norway’s Ship Equip for $159.5m (£100m).
The FTSE 100 firm said Ship Equip, which generated revenues of $56m in 2010, would allow it to expand its high-speed communications business, which provides services to the shipping, offshore oil & gas and fishing industries.
Inmarsat said it would finance the deal with existing liquidity facilities and that it expected the transaction to close in a matter of weeks.
Ship Equip will continue to operate as a separate subsidiary alongside Inmarsat’s Stratos and Segovia businesses.
James Parm, chief executive of Stratos, said: “We are delighted to welcome Ship Equip and their management team into the Inmarsat group.”
Morten Singleton, an analyst at Investec, said the deal – which equates to three times historical revenues and over 15 times earnings – looked pricey at first glance.
But he added: “But there is a strong strategic rationale behind the deal that gives greater comfort on medium-term growth outlook, and beyond.”
Last month, Inmarsat warned of slower-than-expected growth in its core maritime business as customers switched from high-margin voice calls to cheaper data services. The dip meant revenue growth in the fourth-quarter fell to 8.4 per cent, compared to a full-year rise of 12.9 per cent.
Shares in the firm closed 0.8 per cent higher at 605.5p yesterday.
MEET THE ADVISER
ANDREW McSpadden, co-founder of Trinity Advisers, advised Inmarsat on its purchase of Ship Equip. McSpadden set up Trinity in 2003 after leaving Credit Suisse, where he was director of media and telecom investment banking.
McSpadden also advised Inmarsat on its purchase of Stratos Global in 2009. Other transactions include the acquisition of Intelsat by private equity houses Apax, Apollo, Madison Dearborn and Permira. And he advised Apax and Permira on their acquisition and financing of Inmarsat Ventures.
Other clients include Astrium, Liberty Media and Virgin Media.
McSpadden is a US citizen but has been living and working in London since 1996.
He holds a BA in Economics and International Relations from the University of Pennsylvania.