Speedcast enters definitive agreement to acquire Globecomm

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Speedcast International has announced that it has entered into a definitive agreement to acquire Globecomm Systems Inc. from affiliates of HPS Investment Partners, LLC Tennenbaum Capital Partners, LLC and certain other members of Globecomm for an estimated net purchase consideration of US$135 million, including expected purchase price adjustments.

Globecomm is a leading provider of remote communications and multi-network infrastructure to Government, Maritime, and Enterprise sectors in over 100 countries. It is headquartered in Hauppauge, New York.

Speedcast estimates it will generate over US$15 million in annual cost synergies within 18 months of the acquisition. The cost synergies are expected to be generated across the business, including through footprint rationalisation, network improvements and improved procurement.

The acquisition will be funded by a fully underwritten US$175 million add-on to Speedcast’s existing 7‐year senior secured credit facility (due 2025) from the US institutional term loan market, which will also be used to repay a portion of Speedcast’s revolving credit facility and thus enhance Speedcast’s liquidity position.

The transaction is expected to close in Q4 2018, subject to the completion of customary closing conditions, including regulatory approvals. J.P. Morgan and Jefferies acted as Financial Advisors to Speedcast. Goodwin acted as Legal Advisors to Speedcast. Kirkland and Ellis LLP acted as Legal Advisors to Globecomm.

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