Gogo Business Aviation is buying Satcom Direct, a satellite communications hardware manufacturer and service provider, in a deal that took the business aviation industry by surprise when it was announced this morning. Under the agreement, Satcom Direct will receive $375 million in cash and five million shares of Gogo stock at closing, and up to an additional $225 million in payments tied to realizing certain performance thresholds over the next four years. The deal is expected to close by year-end.
The move boosts Gogo into a much higher satcom orbit, adding Satcom Direct’s Plane Simple antenna and hardware product lines for geostationary (GEO) satellite networks such as Viasat and Intelsat to Gogo’s soon-to-launch low-earth-orbit (LEO) Galileo system, which runs on Eutelsat’s OneWeb network. If anything, this acquisition will give Gogo a solid competitive edge and a full line of products, including its air-to-ground system in the U.S. and Canada, that will provide a counterbalance to business aircraft owners’ keen interest in SpaceX’s Starlink LEO satcom.
Satcom Direct confirmed that the Melbourne, Florida-based SD Data Center will be included in the acquisition. The company uses this data center to provide a layer of cybersecurity for data to and from customer aircraft.
“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 Oakleigh Thorne, Gogo Chairman and CEO. “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.”
“Satcom Direct is thrilled to be joining forces with Gogo, a company that shares our focus on delivering outstanding service and leading innovation,” said Chris Moore, Satcom Direct President. “Our businesses have highly complementary core competencies, and our combined financial strength and expertise unlocks opportunities to invest in new technology and deliver significant long-term value creation.”
The company said that members of the Satcom Direct leadership team are expected to join Gogo after the deal closes.