SES to strengthen itself with $3.1B Intelsat acquisition

Satellite communications company SES announced April 30 that it will acquire its competitor Intelsat, saying it will pay $3.1 billion to buy 100% of equity in the latter company. This implies an enterprise value of $5 billion for Intelsat. 

SES has said it will finance the transaction from existing cash and equivalents as well as fresh debt and contingent value rights based on the company’s share of potential compensation for usage rights to C-band spectrum in the US (more on that later). 

The news may not come as a shock given the two companies have been discussing a tie-up for over a year. SES confirmed talks with Intelsat were ongoing in March 2023, after a Bloomberg report said both firms were close to reaching a deal worth over $10 billion, including debt.

Today’s announcement says the deal – which is subject to regulatory approvals – would create a company with a gross contract backlog of €9 billion (US$9.63 billion), revenues of €3.8 billion ($4.07 billion), and adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of €1.8 billion ($1.93 billion).

Stronger together

The deal is also expected to give rise to a stronger and more resilient multi-orbit operator with improved coverage, a larger suite of solutions and more resources to innovate. Post-merger, the new SES would have over 100 geostationary earth orbit (GEO) satellites and 26 medium-earth orbit (MEO) satellites, with eight GEO and seven MEO satellites to be added by the end of 2026. 

“The acquisition of Intelsat by SES marks a significant milestone in the satellite communications industry,” said Christof Kern, the business development lead for satellite and space at consulting company TTP, via email. “Bringing together two legacy giants from Europe and the US, both companies are focused on driving efficiencies and maximizing their investments in both GEO and MEO satellites.”

“However, based on the operating efficiencies gained, there’s potential for deploying low earth orbit (LEO) satellites in the future to meet high-bandwidth and low-latency connectivity demands when required,” he also said, adding that “with confidence in the competitiveness of these satellites, when compared to Starlink’s LEO constellation, the combined entity will be able to offer wider coverage of the Earth’s surface at a more affordable cost, albeit at higher latency.”

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