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Advent to buy satellite operator Maxar Technologies for about $4 bn

Private equity firm Advent International on Friday agreed to buy satellite operator Maxar Technologies Inc for about $4 billion.

Including debt, the deal is valued at $6.4 billion, marking one of the largest leveraged buyouts in recent months, amid a challenging financing environment that has made it increasingly difficult to back acquisitions involving private equity firms.

Advent has committed to provide $3.1 billion of equity financing for the deal, while the British Columbia Investment Management Corporation is putting up $1 billion.

Advent has offered $53 per Maxar share held, a premium of nearly 129% to the stock’s last closing price. Maxar’s shares were up about 122% in early-afternoon trading.

Maxar and Advent were in negotiations before agreeing to a deal as the company did not run a formal sale process, according to a source familiar with the matter. Advent approached the company in late spring to explore a transaction and negotiations kicked-off in the fall, the source said.

Westminster, Colorado-based Maxar has more than 90 satellites in orbit that provide communications, imagery and data to customers, including the U.S government, Intelsat and SiriusXM. In recent months, Maxar has provided high-resolution satellite images of the Ukraine war, among other things.

The company is also involved with NASA’s Artemis program to return to the moon.

Advent has invested nearly $28 billion in defense, security and cybersecurity in the last three years, with its portfolio of companies supporting many satellite and defense platforms and serving the U.S. government and its allies.

The deal is expected to close in mid-2023. The agreement also includes a 60-day “go-shop” period.

“There may be a defense prime such as Raytheon or L3Harris that would be willing to put in another bid in the go-shop period,” said Austin Moeller, an analyst at Canaccord Genuity.

He added that a strategic buyer would likely face a tough antitrust review from the U.S. Federal Trade Commission, making it more likely for Maxar to end up with a private equity firm buyer.

In February, Lockheed Martin terminated its deal to acquire Aerojet Rocketdyne following a lawsuit by the FTC to block the acquisition.

Maxar, whose history can be traced back to the 1950s, has lost about 20% in market value so far this year, compared with losses of more than 50% for other satellite imagery companies, such as Satellogic Inc and Spire Global Inc, that went public through mergers with blank-check firms.

J.P. Morgan Securities LLC and Wachtell, Lipton, Rosen & Katz advised Maxar. Goldman Sachs & Co LLC, Morgan Stanley & Co LLC and Weil, Gotshal & Manges LLP advised Advent. Reuters

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