Two aviation connectivity providers will become one with Gogo Business Aviation’s acquisition of Satcom Direct.
Both US companies provide hardware for internet and other satellite communications to private jet operators.
Go deeper with GlobalData
According to the companies’ filing, Gogo will acquire Satcom Direct for $375m in cash and five million shares of Gogo stock. An additional $225m could be paid to Satcom Direct’s current owners, depending on the company’s continued financial success. Satcom Direct is expected to generate about $485m in the next year.
If and when the deal closes (expected by the end of 2024) Gogo said it will be paid for with $275m in new debt, and cash-on-hand.
“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 Gogo chairman and CEO Oakleigh Throne.
“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,” he added.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataWhile Gogo will continue to focus on the business aviation sector as its main target for now, the acquisition significantly adjusts its position in the military and government aviation sectors and Gogo hinted at further manoeuvres in that space.
Gogo emphasised its Galileo platform as the centre of its newly combined product line (“a LEO-GEO-ATG product line for business aviation”) with Satcom Direct’s products now benefitting from Gogo’s client base.
“[Gogo can provide] unmatched offerings for every segment of the BizAv market expected to drive revenue growth, such as North American ATG to meet basic connectivity needs to integrated multi-orbit LEO-GEO solutions with a combination of Gogo Galileo and Satcom’s Plane Simple GEO solutions,” they said.
The military aspect is “part of a multi-band, multi-orbit solution” according to Throne.
The company explained:
“[The acquisition] provides Gogo entry into the large and fast-growing military/government mobility vertical. Satcom Direct’s existing products and expertise immediately diversify Gogo’s revenue, and when combined with Gogo Galileo, create a growth opportunity with unique integrated LEO-GEO products to serve military and government customers.”
“The acquisition will expand the platform for the sale and service of new products as the technology evolves. The combined installed base of 12,000 unique global customers will create an advantageous pathway to sell upgrades to the new technologies, which can be installed faster and more cost-effectively than the competitor’s products.”
Satcom Direct’s President Chris Moore said the 27-year-old firm was expecting the new structure to lead to innovation.
“Satcom Direct is thrilled to be joining forces with Gogo, a company that shares our focus on delivering outstanding service and leading innovation.
“Our businesses have highly complementary core competencies, and our combined financial strength and expertise unlock opportunities to invest in new technology and deliver significant long-term value creation,” he said.
