Gogo Inc. (NASDAQ: GOGO) has announced it has agreed to sell its Commercial Aviation (CA) business to Intelsat S.A. (OTC: INTEQ) for a cash consideration of USD 400 million, the company said.
Intelsat expects to finance the transaction utilizing cash on hand and borrowings under its USD 1 billion debtor-in-possession credit facility and has obtained support from key economic stakeholders, as well as approval from the US Bankruptcy Court for the Eastern District of Virginia, Richmond Division, to complete the acquisition.
The transaction, which is expected to close before the end of the first quarter 2021, remains subject to customary closing conditions and certain regulatory approvals.
The sale enhances Gogo´s financial flexibility and positions the company to cccelerate growth in profitable business aviation.
Gogo, which will remain a public company, will use the proceeds from the transaction to improve its net debt position and continue to invest in growth opportunities such as Gogo 5G.
As part of the transaction, Gogo will enter into a 10-year network services agreement, under which Intelsat will have exclusive access to Gogo ATG services for the CA market in North America, subject to minimum revenue guarantees of USD 177.5 million.
BDT & Company served as primary financial advisor to Gogo, J.P. Morgan and Morgan Stanley & Co. LLC served as financial co-advisors, and Debevoise & Plimpton LLP served as legal advisor.
Gogo is an inflight internet company that provides broadband connectivity products and services for aviation.