Medlock Faces New Challenge As Inmarsat CFO

Rick Medlock is excited about the challenge facing him upon his arrival at Inmarsat, the London-based mobile satellite giant. Medlock, who currently is CFO of NDS [NDS], will move to Inmarsat in September.

In his job transition, Medlock will leave a key provider of Conditional Access (CA) and pay-TV services to join a satellite operator on the rise. In terms of his challenge ahead, Medlock told Satellite News in an exclusive interview, “I came to NDS from the private-equity world following three management buyout deals with Permira. When the opening came up at Inmarsat, I thought it was a very interesting opportunity. Inmarsat has got a great future. They have got some big challenges in terms of capital expenditure programs and launching satellites. There is a lot of capital spent and a lot of debt. For someone who has been in both the public and private equity markets, it is a position that really appeals to me.”

Medlock forms part of a new management team at Inmarsat. He joins Andy Sukawaty, who was appointed CEO in March. The goal will be to make Inmarsat one of the winners on a satellite landscape where new dynamics are taking shape. Private equity firms have invested in such satellite operators as Inmarsat, New Skies [NSK] and PanAmSat [SPOT].

In terms of the influence the private equity investments will have on the sector, Medlock commented, “When you’ve got private equity coming into a market like this, it is usually to change the dynamics of the market place — to make it more efficient and to drive consolidation and hopefully to also drive expansion in the sector. I think the satellite market has been used to fairly low growth rates in the past, but the opportunity for someone like Inmarsat with a brand new family of satellites going up with much bigger capacity and faster bit rates is fantastic.”

Medlock believes the satellite sector could become much more dynamic as a result of more private-equity companies becoming involved. He commented, “I think the move to venture capital is pretty healthy. It unblocks some of the structural rigidities that have been in the market for the past ten years, whilst under the ownership of governments, telcos, and quasi government organizations. I think it makes it a far more dynamic sector and that is one of the attractions of going in somewhere like Inmarsat.”

Medlock believes his background will be of benefit in the satellite industry with more private-equity players involved. “It has got to be a big plus. The fact that I have worked with Permira before and I know Apax reasonably well, should be a big plus for any CFO going into the industry,” he told us.

It certainly represents an interesting challenge for Medlock, who had an eventful time at NDS. He helped oversee the company’s IPO in 1999 and, in 2002, the company was being hit by lawsuits from Canal+ Technologies and DirecTV. However, NDS recently announced its full year results and showed it has performed strongly in recent months.

“Our results were above expectations,” Medlock said. “In our guidance, we said our profits would be between $73 million and $77 million, and we came in at $81.5 million. We were comfortably in excess of those. The revenues were at the top end of the range. They were $403.1 million, and our range was between $384 million and $402 million. I think we’ve done pretty well.”

The strong performance of NDS in recent times has been underpinned by its ability to pick up contracts in the satellite pay-TV sector. In 2003, the operator picked up key contracts from Viasat in the Nordics, and Foxtel in Australia, among others.

(Inaki Latasa, Hispasat, e-mail, [email protected])