On 30th April 2024, Luxembourg satellite giant SES announced it was acquiring Intelsat in a significant all-cash deal totalling $3.1bn.
SES, a leading satellite and ground communications solutions provider, is taking over the world’s largest integrated space and terrestrial network, Intelsat. The acquisition is funded using existing cash resources of about $2.6 billion and new debt, supported by a committed bridge facility to build synergies, drive revenue growth, and strengthen the company’s financial position.
Creating value through synergies
This acquisition gives SES 100% of the equity of Intelsat Holdings; $3.1 billion (€2.8 billion) in cash and certain contingent value rights. This transaction, valued at $5.0 billion (€4.6 billion), is poised to unlock substantial opportunities, with an estimated net present value (NPV) of €2.4 billion, equivalent to 85% of the total equity value of the deal.
“This important, transformational agreement strengthens our business, enhances our ability to deliver world-class customer solutions, and generates significant value for our shareholders in a value accretive acquisition which is underpinned by sizeable and readily executable synergies.”
Adel Al-Saleh, CEO of SES.
Enhancing global capabilities
The merger brings together two leading operators to create a stronger multi-orbit satellite communications provider with expanded coverage, improved resiliency, and a broader suite of solutions.
With a combined fleet of over 100 Geostationary Earth Orbit (GEO) and 26 Medium Earth Orbit (MEO) satellites, the integrated company is poised to meet the evolving demands of the market.
“By combining our financial strength and world-class team with that of SES, we create a more competitive, growth-oriented solutions provider in an industry going through disruptive change.”
David Wajsgras, CEO of Intelsat.
Delivering value to customers
The combined entity will offer enhanced solutions across government, mobility, fixed data, and media segments, catering to a wide range of customer needs. From secure and reliable connectivity for government applications to seamless integration with cloud and 5G applications for fixed data customers, the merger expands the portfolio of offerings.
Customers across these segments will benefit from improved network reach, resiliency, and productivity, setting a new standard for satellite communications.
Driving shareholder returns
With a pro forma revenue of approximately €3.8 billion and robust growth prospects, the combined company is expected to generate sustained EBITDA growth and strong cash flow generation. The two companies are expected to invest combined CapEx of approximately €1 billion in 2024, with an average of €600-650 million per annum for 2025-2028 including synergies.
The transaction is set to be free cash flow accretive from Year 1, supporting future investment in innovation and shareholder returns. Adherence to investment grade metrics, including maintaining a net leverage below 3 times within 12-18 months after closing, underscores the commitment to long-term financial health.
The acquisition of Intelsat by SES marks a significant milestone in the satellite communications industry, positioning the combined entity as a formidable player in the market. With a focus on delivering value to customers, driving shareholder returns, and leveraging synergies, the merger sets the stage for a new era of growth and innovation in satellite communications.
This transaction is slated to conclude by the second half of 2025.
