Three firms pursue satellite operator

Three private equity firms have further highlighted the popularity of satellite operators as buyout plays, submitting offers for the European satellite operator International Mobile Satellite (Inmarsat).

Apax, Permira and US-based Apollo Advisors will compete in the final round of bidding for the business, thought to be valued at around £1bn (E1.57bn). The Financial Times reports that final offers for the company are to be submitted by November 22. 

Inmarsat is owned by a consortium of European telecom groups, including the former state-owned operators of France, Germany and the UK. France Telecom is one of a number of operators keen to offload its satellite interests trying to reduce multi-billion euro debt piles. France Telecom recently tried to sell its 23 per cent interest in Eutelsat to French private equity house Eurazeo. The deal collapsed when the two firms failed to agree a price.

Private equity firms are attracted to Inmarsat and its fellow satellite operators, Eutelsat (European Telecommunications Satellite) and Intelsat (International Telecommunications Satellite) because of their strong cash flows and profitability. Inmarsat, the smallest of the three operators, reported 2001 net profit of $66m on revenue of $442m.

In January, Telecom Italia sold its stake in all three companies for $480m to Lehman Brothers' private-equity group. Following the collapse of talks between France Telecom and Eurazeo, reports emerged in September of possible bids from Apax Partners and Carlyle Group for Eutelsat.