MUMBAI: Intelsat, today, announced the signing of a definitive agreement that provides for the amalgamation under Bermuda law of Intelsat and a subsidiary of Zeus Holdings Limited (Zeus).
Zeus is a company formed by a consortium of funds advised by Apax Partners, Apollo Management, Madison Dearborn Partners and Permira.
At closing, Zeus will be acquiring the global satellite communications leader providing services in over 200 countries and territories- Intelsat.
Intelsat's current shareholders generally will be entitled to receive $18.75 for each Intelsat share issued and outstanding immediately prior to closing, subject to adjustment in a specified circumstance, says a company release.
The total value of the transaction, including approximately $2 billion of existing net debt, is approximately $5 billion. The transaction was approved unanimously by the Intelsat's board of directors.
"This transaction comes at a time when Intelsat is successfully executing on its strategies for market leadership in the fixed satellite services sector. We believe that the acquisition of Intelsat by this consortium of well-respected private equity investors represents the best opportunity for Intelsat to achieve its strategic goals," said Intelsat, chief executive officer Conny Kullman.
"Once completed, this transaction will both satisfy our shareholders' interest in a strong valuation and allow shareholders to monetise their investments. At the same time, the deal will align Intelsat's future with a force that can make our vision for continued leadership a reality," he added.
Says to the consortium representative, "Our consortium is very pleased to begin a partnership with Intelsat, a global leader in the fixed satellite services sector. Intelsat's healthy, young and flexible satellite fleet, seasoned management team, strong brand and solid backlog of long-term contracts create a very attractive investment opportunity,"
"As Intelsat enters its next stage of strategic development, its operational strength, stable, diversified revenue base and global market presence offer the company a variety of exciting organic and strategic growth opportunities, and the consortium will provide the financial and strategic support Intelsat needs to capitalise on these opportunities," the representative added.
At closing, all of the existing service commitments between Intelsat and its customers, including those dating from the privatisation in 2001, will remain in force.
"Intelsat and members of the consortium understand that strong and stable media, communications, corporate and government customers are the lifeblood of Intelsat's business. Although the satellite industry continues to evolve, our commitment to our customers, including continuing to deliver the 'gold standard' in satellite services, remains unchanged," informed Kullman.
Required approval of shareholders holding 60 per cent of Intelsat's outstanding shares will be sought in a general meeting of shareholders expected to be held later this year, adds the release.
Zeus intends to finance the transaction in part with debt that, after giving effect to the transaction and consistent with the terms of Intelsat's existing indebtedness, will be at the Intelsat (Bermuda), ltd level.
The security expected to be granted in connection with this new debt will be in compliance with the terms of Intelsat's existing indebtedness and is not expected to result in the grant of security to the company's existing senior notes.
Merrill Lynch and Morgan Stanley are acting as financial advisors to Intelsat, ltd in connection with the transaction. Credit Suisse First Boston, Goldman, Sachs & co and Lehman Brothers Inc are acting as financial advisors to the consortium in connection with the transaction. The new debt financing will be led by Deutsche Bank Securities Inc., Credit Suisse First Boston and Lehman Brothers Inc, adds the release.
