MDA Acquires Space Systems/Loral for $875 Million
By Jeffrey Hill | June 28, 2012
[Satellite TODAY Insider 06-28-12] Canadian provider of essential information solutions MacDonald, Dettwiler and Associates (MDA) has signed an agreement to acquire satellite manufacturer Space Systems/Loral (SS/L) for $875 million in an immediately accretive transaction, MDA announced June 27.
The acquisition transforms MDA into a significant commercial communications entity as it adds SS/L a top global provider of commercial communications satellites to MDA’s portfolio and provides the company with critical mass in the U.S. market.
Following the acquisition, MDA said it would have combined annual revenues of $1.9 billion as of the 2011 calendar year and a combined backlog of $2.8 billion as of March 31, 2012. SS/L will retain its brand name and management team.
MDA President and CEO Daniel Friedmann said the acquisition is expected to provide global opportunities for his company’s future growth in new markets fueled by strong consumer communications needs.
“This is a game changing transaction for our company,” Friedmann said in a statement. “With one move, we are bringing together two market leaders to create a unique global communications and information company with a strong commercial focus. Post-acquisition, more than two-thirds of MDA’s total revenues will come from the commercial market.”
SS/L has a U.S.-based workforce of 3,200 employees, and more than one million square feet of facilities.
“SS/L’s business is fundamentally driven by the worldwide demand for television, digital audio, broadband Internet, mobile communications, and voice telephony,” Friedmann added. “Billions of people around the world depend on these services and demand continues to increase. By acquiring one of the major companies that enable these essential communications services, MDA will move immediately to the forefront of this growing business.”
According to Futron’s Satellite Orders Report, SS/L has been awarded more commercial satellite contracts worldwide than any other company since 2005. Its full-year revenues for 2011 were $1.1 billion, with pro-forma operating EBITDA of $153 million.
While MDA inherits a manufacturer with strong revenue visibility moving forward, it also picks up ViaSat’s litigation against SS/L, which was filed in February seeking monetary damages to compensate for the alleged theft of technologies contained in three ViaSat patents, as well as a permanent injunction to prevent SS/L and Loral from continuing to use ViaSat technology. ViaSat will seek a jury trial in the matter with the Southern District Court of California.