Consortium mulls Intelsat sale

A consortium of four private equity firms is contemplating the $17 billion sale of satellite operator Intelsat, potentially yielding a tenfold return on its initial investment.

UK-based buyout firms Apax Partners and Permira and US-based Madison Dearborn Partners and Apollo Management are reportedly mulling a sale of Intelsat, the world’s biggest commercial-satellite operator, for nearly $17 billion (€12.5 billion) including debt. 

The consortium is considering a sale of the operator, according to The Wall Street Journal, allegedly following an approach from the Blackstone Group. Intelsat is expected to have an equity value of about $6 billion; given its current debts of around $11 billion, the deal would have an enterprise value of about $17 billion.

The consortium could earn as much as ten times its initial investment in Intelsat, according to Bloomberg, which reports that it contributed a $515 million equity cheque when it bought the business in 2004.

Intelsat has 51 satellites which provide television pictures for broadcasters including US television companies ABC and CBS. After it was bought by the consortium, Intelsat also acquired rival operator PanAmSat Holding Corporation for $3.2 billion.

The satellite company reported revenues of $1.7 billion in 2006.

According to reports, Credit Suisse is advising the private equity consortium.