FiberLight to merge with Globalstar in $1.65bn deal

30 April 2018 | Natalie Bannerman

Globalstar, the telecoms satellite provider, will merge with FiberLight, the metro fibre provider, in a deal worth $1.65 billion.

Under the terms of the agreement 15.5 million shares of common stock in CenturyLink, $100 million in cash and minority investments in complementary businesses and assets of $25 million in exchange for Globalstar common stock valued at roughly $1.65 billion.

The deal will be signed with Thermo Acquisition, the holding company of Globalstar. Thermo Acquisition is controlled by Jay Monroe, executive chairman of the board of directors and chief executive officer of the company. Completion is due to take place by Q3 of 2018 at which point the parent company will be renamed as Thermo Companies.

Commenting on the merger Monroe, said: “This transaction brings together strategic assets that are critical to the complex needs of next-generation networks, allowing service providers to deliver the sophisticated services their customers increasingly expect. The combined entity is uniquely positioned to meet a broad range of customer requirements, from low latency and high capacity networks, to consistent connectivity across large geographical areas. Long-term shareholders should benefit significantly from the combined entity’s strong balance sheet and recurring revenue from the portfolio of satellites, spectrum, fibre infrastructure and other related assets.”

The newly formed company will hold a number of unique assets including Globalstar’s satellite business which has a 2017 adjusted EBITDA of roughly $32 million; a spectrum management company; FiberLight which has approximately 14,000 route miles of fibre and an adjusted EBITDA of $67 million; and Thermo Investments which has investments in CenturyLink, Pivotal Commware and Orion Labs, as well as $100 million of investable cash.

 The new company will form with four principle operating subsidiaries under the Thermo Companies umbrella: Globalstar, FiberLight, Global SpectrumCo and Thermo Investments.

The two parties say that the merger will create “a fundamentally stronger company with significantly reduced leverage and diversified holdings.”

Monroe is set to increase his ownership share of the new company, moving from 58% as it is currently to approximately 83% and 87% at the time of closing.