A wholesale broadband services business, EBI was created as part of Viasat’s previous partnering arrangement with Eutelsat Communications. Providing fixed and mobile broadband services on a wholesale basis in the European and Mediterranean markets, EBI was 51% owned by Eutelsat with Viasat holding 49%.
The 51% controlling interest in EBI has now been acquired for €140 million subject to customary net working capital and net debt adjustments. The purchase price will be funded with available cash, resulting in a cash outlay of €50 million, net of approximately €90 million of EBI's cash on hand.
“Today's transaction accelerates Viasat's European broadband objectives by strengthening our services footprint and facilitating further market penetration,” said Keven Lippert, chief commercial officer, Viasat.
“By gaining full control of KA-SAT, Viasat can further expand its growing mobility business as well as establish operations and market presence ahead of our ViaSat-3 service launch, including the introduction of new capabilities enabling high-speed, high-bandwidth 'ViaSat-3-like' home internet service plans in select European markets,” Lippert continued.
“This earlier market roll-out will enable Viasat to build awareness and market knowledge ahead of the European service launch of the ViaSat-3 satellite platform. Additionally, through 100% ownership of EBI, Viasat will be better equipped to execute its distribution strategy ahead of the ViaSat-3 services launch by onboarding new local partners,” he added.
Under the agreement, Eutelsat and its subsidiaries will continue to provide transitional services for a limited period of time to Viasat's EBI business, including the operation of the ground network for KA-SAT, while Viasat/EBI will provide service continuity to the KA-SAT subscriber base of Eutelsat's Bigblu Broadband Europe division.
In a statement, Viasat said that two years following closing, the €140 million in consideration “may be adjusted up or down by up to €20 million depending on the performance of certain EBI financial metrics achieved over this period”.
The transaction is expected to close in Q1, 2021.
