MUMBAI: It’s taken off with the right velocity and direction in 2025. Israeli satellite-based broadband communications provider Gilat Satellite Networks announced on 7 January that it has successfully closed the acquisition of US-based provider of next-generation satcom terminal solutions and aircraft communications technologies, Stellar Blu Solutions.
The cost: $98 million in cash, as adjusted. Gilat had $115 million in net cash at the end of 2024, but it went for a new secured credit line of $100 million from HSBC Bank US and Bank Hapoalim to fund $60 million of the consideration paid at closing. The remaining $40 million, from the secured credit line, along with the company’s resources, is expected to be called upon and cover potential earn-out payments. The three year loan will bear interest at a rate of SOFR plus 2.6 per cent to 3.35 per cent.
Funding this acquisition through a combination of Glat’s interna resources and a secured credit line will provide it with additional flexibility given the opportunities in the market. The acquisition amount may go up by up by an additional $147 million in cash, conditioned upon the business achieving operational and strategic business milestones, during the first two years that follow the signing of the agreement.
Says Gilat CEO Adi Sfadia: “This acquisition is a pivotal step in our strategy to expand Gilat’s presence in the growing in-flight connectivity (IFC) market. We expect Stellar Blu’s cutting-edge technologies, combined with Gilat’s advanced IFC solutions to position us as a market leader for both commercial and business aviation, as well as adjacent high-end mobility markets that are ideal for electronically steered antenna (ESA) applications.”
He adds: “With the increasing demand for free, seamless, high-quality in-flight wifi and Stellar Blu’s pioneering expertise in multi-orbit Leo and Geo IFC solutions, we will be able to meet the most demanding service level agreements in the industry, opening up new growth opportunities in aviation and beyond. We expect to ship hundreds of Stellar Blu’s Sidewinder terminals during the upcoming quarters.”
The company expects its annual revenues from Stellar Blu to range between $120 and $150 million in 2025, based on the latter’s robust backlog. In addition, the acquisition is expected to be accretive on non-GAAP results for 2025. Furthermore, the company estimates that once Stellar Blu reaches its target manufacturing capacity, which Gilat expects will occur during the second half of 2025, Stellar Blu’s EBITDA margin is expected to be above 10 per cent.
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