Satellite business will return to private ownership

Following the announcement late last week that mobile satellite communications company Inmarsat Plc had received a takeover approach, the bid has since been accepted.

The deal is worth £2.6bn ($3.4bn), but with debt included it totals some $6bn. The deal, subject to regulatory approvals, is expected to be completed by the end of this year and the company will be taken private.

The offer was made by a consortium named Triton Bidco, which comprises UK-based Apax Partners, US-based Warburg Pincus, and two Canadian pension funds – CPPIB and the Ontario Teachers’ Pension Plan Board.

When the announcement of the offer was made public last Friday, it was revealed that the non-binding approach of $7.21 (£5.47) per share had been made at the end of January. Discussions between the consortium and Inmarsat have since led to the acceptance.

Inmarsat operates a network of 13 satellites orbiting at 22,000 miles from the earth, providing a range of bandwidths primarily for the maritime and aviation sectors. Started as a maritime safety company in 1970, Inmarsat was later acquired by Apax and private equity company Permira in 2003. They took it public, listing the company on the London Stock Exchange in 2003 and making a £300m profit on their £900m purchase cost.

Inmarsat’s performance has been volatile, with its share price ranging from over £11 per share to under £4 per share. The company has returned to a growth situation with its aviation interest growing significantly.