New Skies Satellites, the global satellite communications operator based in The Hague, Netherlands, is to be acquired by Blackstone Group of the US for $956 million (€776 million) in cash, equivalent to $7.96 per fully diluted share.
According to a statement, the transaction has received unanimous approval from the supervisory and management boards of New Skies, who have said they intend to recommend it to the company’s shareholders. The offer represents a 14 percent premium to New Skies’ share price on April 28, the day before it announced it was considering strategic alternatives.
Shareholders will discuss the offer at an extraordinary general meeting to be held within the next 40 days. New Skies said it anticipated completion of sale following regulatory approval and “certain financing and other customary conditions” by the end of 2004 or early 2005.
New Skies offers video, data, voice and internet communications services to telecommunications carriers, broadcasters, large corporations, internet services providers and government entities around the world. It has five satellites in orbit, global ground facilities, and an additional spacecraft under construction. The company has also secured certain rights to exploit additional orbit positions.
The satellite industry has been consolidating as a result of overcapacity, with private equity firms attracted by predictable cash flow. Last year, New Skies delivered net profits of $12 million on sales of $215 million. In April, private equity firm Kohlberg Kravis Roberts acquired PanAmSat, the US commercial satellite operator, for $3.53 billion.
“The management and supervisory boards have considered a number of options to maximise shareholder value, and have concluded that the offer from Blackstone isin the best interests of New Skies’ shareholders, employees and customers,” said New Skies chief executive Dan Goldberg.
He added: “With the strong backing of Blackstone and its extensive experience investing in, and partnering with, telecommunications and media companies, we will have the best possible foundation on which to grow our business in the coming years.”
Goldman Sachs & Co and NM Rothschild acted as financial advisers to New Skies, while Cleary, Gottlieb, Steen & Hamilton and De Brauw Blackstone Westbroek provided legal advice to the firm. Morgan Stanley and Deutsche Bank Securities were financial advisers to Blackstone, while Simpson Thacher & Bartlett served as legal advisers. Deutsche Bank and ABN AMRO are providing acquisition financing for the deal.
Blackstone Group, which was founded in 1985, has offices in New York, Atlanta, Boston, London and Hamburg. The firm is currently investing the $6.45 billion Blackstone Capital Partners IV fund.