McLean satellite operator to buy in-flight broadband biz for $400M

McLean-based communications satellite services provider Intelsat Corp. announced Monday it will acquire in-flight broadband connectivity provider Gogo Inc.’s commercial aviation business for $400 million.

Under the acquisition, Intelsat plans to pair its satellite and ground network to Gogo’s base of more than 3,000 commercial aircraft, according to a company statement. The transaction is expected to close in the first quarter of 2021. 

“Consumer demand for in-flight connectivity is expected to grow at a double-digit rate over the next decade, notwithstanding the impact of COVID-19,” Intelsat CEO Stephen Spengler said in a statement. “The addition of Gogo’s commercial aviation business provides compelling strategic value for our stakeholders and makes strong commercial sense.” Gogo currently serves 21 commercial airlines, including 9 of the 20 top global carriers.

In May, Intelsat announced it had filed for Chapter 11 bankruptcy protection to spend money on a program that would allow it to build 5G infrastructure under the Federal Communications Commission order. The clearing project will cost Intelstat $1 billion to meet FCC deadlines and will make the company eligible to receive $4.87 billion in accelerated relocation payments. The company’s day-to-day operations will continue as usual, according to Intelsat.

The U.S. Bankruptcy Court for the Eastern District of Virginia, Richmond Division, approved the transaction, as well as Gogo’s board of directors. Intelsat expects to finance the transaction with cash on hand and borrowings under its $1 billion debtor-in-possession credit facility and the company has obtained support from key economic stakeholders.

“A priority growth objective for Intelsat is to extend our reach closer to the millions of customers who use our satellite capabilities to stay connected around the world,” Spengler said in a statement. “The addition of Gogo’s commercial aviation business is a significant step toward this goal. We are growing beyond satellite connectivity to expand into consumer-optimized managed services.”

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