Gogo and Satcom Direct have announced entry into a definitive agreement under which Gogo will acquire Satcom Direct. Gogo said that the move would create an inflight connectivity provider able to satisfy the performance and cost needs of every segment of the global business aviation and military/government mobility markets.
Under the terms of the agreement, Satcom Direct will receive $375m in cash and five million shares of Gogo stock at closing, and up to an additional $225m in payments tied to realising certain performance thresholds over the next four years.
Satcom Direct is a prominent global geostationary (GEO) satellite inflight connectivity service provider for business aviation (BA). In 2024, Satcom Direct expects to generate approximately $485m in revenue with EBITDA margins of approximately 17% on a pro forma adjusted basis. Satcom Direct generates approximately 80% of its revenue from the business aviation market, and approximately 20% from the military/government mobility market.
“This transaction accelerates our growth strategies of expanding our total addressable market to include the 14,000 business aircraft outside North America, and delivering solutions that meet the needs of every segment of the BA market,” said Oakleigh Thorne, Gogo chairman and CEO. “Together, Gogo and Satcom Direct will offer integrated GEO-LEO satellite solutions that provide the highest performance of any satellite solution, along with the world-class customer support that the global heavy jet segment demands.”
“This transaction also uniquely positions us to sell our Galileo LEO solution integrated into Satcom Direct’s GEO and L-band offerings as part of a multi-band, multi-orbit solution for the fast-growing military/government mobility market,” said Thorne. “We look forward to welcoming the world-class Satcom Direct team to Gogo.”
“Satcom Direct is thrilled to be joining forces with Gogo, a company that shares our focus on delivering outstanding service and leading innovation,” said Chris Moore, Satcom Direct president. “Our businesses have highly complementary core competencies, and our combined financial strength and expertise unlocks opportunities to invest in new technology and deliver significant long-term value creation.”
Among the benefits noted by Gogo, the move establishes a unique LEO-GEO-ATG product line for business aviation. Gogo expects these offerings to drive revenue growth – from North America ATG to meet basic connectivity needs, to integrated multi-orbit LEO-GEO solutions via the combination of Gogo Galileo and Satcom’s Plane Simple GEO solutions.
The move also provides Gogo entry into the military/government mobility vertical. Satcom Direct’s existing products and expertise will immediately diversify Gogo’s revenue, and when combined with Gogo Galileo, create a growth opportunity with integrated LEO-GEO products to serve military and government customers.
