The satellite operator Intelsat which is working under the bankruptcy protection is preparing to procure the network provider Gogo for a disclosed fee of $400 million. This procurement will go through in the coming six months transforming Intelsat into a company with an additional 50 percent of employees. The chief of operations at Intelsat, Samer Halawi, stated that this addition will scale the headcount of the company to 1700.
The US Bankruptcy Court permitted Intelsat to go through with this plan of acquiring Gogo which will rely on the $1 billion that the company holds as debtors’ monies. This procurement will render Intelsat a WiFi provider for over 2000 commercial airplanes.
Gogo Commercial aviation business resorted to selling itself after failing to obtain the funding it required to because of offering expensive rideshare satellite services and giving out fewer subsidies for its antenna erection services.
Ric Prentiss of the consultation firm called Raymond James stated that Intelsat was the most viable candidate in buying out the Gogo Commercial Aviation business since it has the two firms that have the commonality of customers. He added that if a firm operating in a different spectrum were to purchase Gogo then it would spend a hefty conversion fee into what the acquiring company offers.
Gogo was beginning to pick on its financial side before the pandemic gave it a blow from which it can never recuperate fully. Gogo outlined its $37.3 million loss in the first three months since the declaration of the coronavirus a pandemic.
Halawi states that Intelsat projected the other factors that triggered the losses and advised on acquisition. He says that the rebound by Gogo to its solid position would be achievable in the next three years if Intelsat acquired it and focused on expanding its scope of service delivery.
Halawi speculates that the firm can grow progressively by a factor of 10% making Intelsat enjoys the benefits of the acquisition and also save it the cost of renting rideshare capacities from other service providers.
Halawi says that Intelsat will open Gogo’s satellite broadband to serve its customers and allow customers to enjoy services from other operators where the firm is insufficient. Nevertheless, he was adamant to state the diverse technology from other networks from providers that are not aligned to Intelsat. To conclude, Intelsat convinced the bankruptcy court that the acquisition would help to indemnify it to the right broadcast levels. The firm expects to deliver a decade of reliable network for its customers in the US and in Canada.