Eutelsat Acquires SATMEX
Paris, France, July 31, 2013--Eutelsat announced it has reached an agreement to acquire 100% of Satélites Mexicanos, S.A. de C.V. ("Satmex") for an enterprise value of US$1,142 million. This acquisition, together with the recently ordered EUTELSAT 65 West A satellite, will position the group as a major satellite operator in Latin America, reflecting its strategy to expand in high growth markets.
Michel de Rosen, Eutelsat CEO, said: "The acquisition of Satmex, together with the order announced yesterday of our satellite for 65° West will make Eutelsat a key operator in vibrant digital markets across Latin America. With Satmex's strategic orbital slots, state of the art fleet and upcoming satellites, Eutelsat is gaining a robust platform from which to access the significant opportunities in this region. Via these two strategic steps, we are significantly upscaling our presence in
Based in Mexico, Satmex operates three satellites at contiguous positions, 113.0° West (Satmex 6), 114.9° West (Satmex 5) and 116.8° West (Satmex 8) that cover 90% of the population of the Americas. The company benefits from frequency rights in C and Ku-bands and was granted Ka-band rights in 2012. It has an 11% market share in Latin America where it enjoys a strong franchise in corporate data networks and cellular backhaul. Satmex is targeting an increased contribution from video through its positions at 113.0° West and 116.8° West including through the recently launched Satmex 8 satellite which is well positioned to exploit video opportunities.
In 2012, Satmex's FSS business generated revenues of US$111.8 million and US$89.1 million in adjusted EBITDA. Satmex had a backlog of US$242 million as of 31 March 2013. It has historically enjoyed high customer loyalty, as evidenced by customer retention rates in excess of 95% over the last three years. Satmex also owns and operates Alterna TV, a provider of Hispanic television programming to the US market (revenues of US$14.5 million in 2012). Satmex's subsidiary, Enlaces, a VSAT service provider (revenues of US$11.0 million in 2012) is in the process of being sold.
Satmex is investing to capitalise on key growth opportunities in
Acquisition terms
Eutelsat will acquire 100% of the share capital of Satmex for US$831 million. Based on Satmex's reported net debt of US$311million at 31 March 2013, this price corresponds to an enterprise value of US$1,142 million. Based on the twelve months' EBITDA for the period ending 31 March 2013, pro forma for the incremental capacity already sold on Satmex 8, the transaction EBITDA multiple amounts to 9.7x, excluding the value of tax losses carried forward estimated at around US$100 million.
The consideration will be 100% cash and will be financed through a dedicated bridge facility at attractive terms.
The transaction is expected to close by the end of 2013, subject to government and regulatory approvals and other customary conditions.
Perella Weinberg Partners served as financial advisors to Eutelsat, while Debevoise & Plimpton LLP, Mijares, Angoitia, Cortes y Fuentes S.C. and Hamelink & Van den Tooren N.V. served as its legal advisors.
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