Following a few days of rumours, private equity firm BC Partners is to acquire a majority in Intelsat, the satellite company announced. The company has signed a definitive agreement for the purchase of a majority of the shares of its parent company, Intelsat Holdings, Ltd., by funds advised by BC Partners (BCEC) and certain other investors.
Liberty Media and DirecTV were among a number of other companies that had been linked with the former international organisation.
The BCEC funds-led group will acquire approximately 76% of the primary ownership of Intelsat Holdings, Ltd. in a transaction valuing the Company’s equity at approximately $5.03 billion. Taking into account approximately $11.4 billion of debt as of March 31, 2007, the enterprise valuation implied by the transaction is approximately $16.4 billion. The current shareholders of Intelsat, including funds advised by Apax Partners, Apollo Management, Madison Dearborn Partners, Permira and management, are expected to receive upon closing approximately $4.6 billion in cash, and will continue to hold approximately 24% of the primary ownership of Intelsat Holdings, Ltd.
Intelsat CEO Dave McGlade said in a prepared statement, “This transaction highlights the significant value that Intelsat has created for its shareholders and the tremendous opportunities the business and employees will enjoy going forward. The Company has thrived under private equity ownership, including the 2006 completion of the transformative PanAmSat combination that firmly established Intelsat’s global leadership position. As a result, we have a keen appreciation for the financial and strategic support that a firm such as BC Partners can provide. We are confident that they will continue to endorse Intelsat’s objectives for revenue growth and operating improvements.”
Closing of the transaction is expected to occur within six to nine months, upon the satisfaction of customary conditions, including appropriate regulatory approvals.