Intelsat Buying PanAmSat For $3.2 Billion

Intelsat is acquiring PanAmSat for $3.2 billion in cash. If
the deal receives regulatory approval, the combined companies will control a
fleet of 53 satellites to deliver digital content and services such as
broadband in more than 200 countries.

PanAmSat brings a video-centric customer base to deal, including leading
providers of cable TV programming. Intelsat’s traditional strength is in
providing core telephony and advanced data services to developing and
under served regions around the world.

The privately-held Intelsat distributes video, voice and data for television
and content providers, government and military entities, major corporations,
telecommunications carriers, and Internet service providers.

PanAmSat is the world leader in transmitting standard and high definition
signals, providing satellite streaming to almost 2,000 television channels
around the world. The company’s fleet of 25 satellites is capable of
reaching more than 98 percent of the world’s population through cable
television systems, broadcast affiliates, direct-to-home operators, Internet
service providers and telecommunications companies.

PanAmSat also supports satellite-based business networks in the United
States, as well as specialized communications services in remote areas
throughout the world.

In addition to its core operations of transmitting corporate data and
provisioning government communications, the new company will also focus on
developing advanced communications technologies including digital video,
broadband and Internet Protocol television (IPTV).

“The combination of Intelsat and PanAmSat creates an industry leader with
the ability to provide competitive communications and video services to
consumers and businesses,” David McGlade, Intelsat’s CEO, said in a statement Monday. “The two companies are complementary in customer, geographic and product focus.”

Upon the closing of the deal, McGlade will continue to serve as CEO and a
director of the company. Joseph Wright, currently the PanAmSat CEO, is
expected to become the new company’s chairman of the board.

Under the agreement, Intelsat will acquire all outstanding common shares of
PanAmSat, and additionally Intelsat will either refinance or assume
approximately $3.2 billion in debt of PanAmSat Holding Corp. and its
subsidiaries. Shareholders owning approximately 58 percent of PanAmSat’s
shares have agreed to vote in favor of the combination.

Intelsat and PanAmSat said Monday they anticipate the deal closing in 6-12

“We will leverage our combined intellectual, material and people assets to
continue the high-quality service Intelsat and PanAmSat customers have come
to expect,” said McGlade.

The merger agreement calls for the Intelsat to pay PanAmSat shareholders $25
per share, a nearly 40 percent premium over its IPO price of approximately
six months ago. The combined company is expected to have pro forma annual
revenues of more than $1.9 billion.

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