PARIS — Astrium Services’ billion-dollar purchase of mobile satellite services distributor Vizada will increase Astrium Services’ annual revenue by 60 percent and its employee headcount by about 30 percent, and provide a global distribution network for its existing military satellite communications bandwidth, Astrium Services Chief Executive Eric Beranger said Sept. 9.
In purchasing Vizada, a major distributor of Inmarsat L-band mobile satellite capacity, for $965 million, Astrium is paying 10 times Vizada’s expected 2011 EBITDA — earnings before interest, taxes, depreciation and amortization — and nearly 1.5 times Vizada’s forecasted 2011 revenue of $660 million.
In a press briefing here, Beranger said the price “is fully in line with market valuations” for Vizada, an addition he said will broaden Astrium Services’ product portfolio and geographic reach. Regulatory approval of the purchase in the United States, France and Norway, Vizada’s principal bases of operations, is expected by the end of the year, he said.
In addition to being a major seller of London-based Inmarsat’s L-band mobile satellite services, Vizada distributes L-band services provided by Iridium Communications of McLean, Va.
Beranger said three-quarters of Vizada’s revenue comes from mobile satellite services, with one-quarter derived from fixed satellite links, often in Ku-band. Astrium Services, which owns the British Skynet X-band military telecommunications satellites, has an X-band payload scheduled for launch aboard a commercial telecommunications satellite to be launched over the Americas in 2012.
Beranger said adding Vizada’s global network of 400 distributors to Astrium Services’ network, which includes the Astrium-owned Paradigm Secure Communications of Britain, will be a force multiplier as there is “almost no overlap in the services we offer,” Beranger said.
Importantly, Vizada’s business with the U.S. Department of Defense will provide Astrium Services with a strengthened entry into the U.S. military space market, which is a long-held ambition of Astrium and its parent company, aerospace conglomerate EADS.
Vizada’s revenue is 70 percent commercial and 30 percent government or military, with most of the latter coming from the United States, Beranger said.
Astrium Services’ biggest business is providing military telecommunications bandwidth to the British and German armed forces, and to the NATO alliance and several other governments. The company is competing with Thales Alenia Space of France and Italy to purchase the French Defense Ministry’s Syracuse telecommunications satellites and then operate them under contract to French defense authorities.
The service outsourcing project for Syracuse, called Nectar, has dragged on for months as French government officials debate the pros and cons. There is still no clear indication from French authorities about whether they intend to proceed with the sale and leaseback project.
Astrium Services reported a 26 percent drop in revenue for the first six months of 2011 compared with the same period in 2010, a decline that Beranger said was due in part to the drop in demand for satellite Earth imagery from governments seeking to rein in their spending.
Astrium Services’ Geo-Information division owns the French Spot optical and German TerraSAR-X and TanDEM-X radar Earth observation satellites.
Astrium Services’ performance for the first half of 2011 also was hurt when compared with 2010 because of a large milestone payment made for an Astrium-managed German military satellite telecommunications project.
Total Astrium Services revenue for the first six months of 2011 was 378.3 million euros ($544.4 million).
Beranger said he expects the coming months to witness the return of government customers to the Earth imagery market.
Another factor hurting Astrium Services’ revenue performance in 2011 was the delay in the launch of the two French Pleiades high-resolution optical Earth observation satellites. The first of these spacecraft is now scheduled for launch aboard the new Europeanized version of Russia’s Soyuz rocket late this year.
Astrium Services announced Sept. 9 that it had booked its first major Pleiades contract, with Pasco of Japan. Pasco, an established provider of geospatial services, will have direct access to the Pleiades satellites and will have the rights to imagery within Pasco’s Pleiades distribution area.
The Pleiades satellites will be capable of taking images with a resolution of 50 centimeters, or sharp enough to detect objects of that diameter and larger.
Beranger said French government policy on optical imagery sales does not have a publicly announced technical limitation. Instead, companies request authority to sell imagery of a certain resolution, to certain customers, on a case-by-case basis.
U.S. government policy for Astrium’s principal competitors, GeoEye and DigitalGlobe, has set a 50-centimeter-resolution limit; sales to nongovernment customers of images with a sharper resolution require special permission.
