Airbus To Divest Commercial Mobile Satellite Services Division

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PARIS — Airbus Defence and Space on Sept. 16 said it would sell a suite of assets including its commercial satellite communications services business — mainly mobile satellite services — as it focuses on its core space, military aircraft, missiles and other divisions.

The units targeted for sale “will have better chances for growth and market success in different ownership structures,” the company said in a statement.

An Airbus official said none of the government satellite communications services business lines is affected by the proposed divestiture. The main business to be sold is the commercial mobile satellite division purchased in late 2011 under the name of Vizada.

Airbus purchased Vizada, a major distributor of mobile satellite services from London-based Inmarsat’s fleet of L-band spacecraft, for $960 million. Airbus said Vizada, which counted 700 employees at the time, would post $660 million in 2011 revenue, with $95 million in EBITDA, or earnings before interest, taxes, depreciation and amortization. Airbus said the business reported about the same revenue in 2012.

The former Vizada business provides maritime, aeronautical and land-based mobile communications services to government and commercial customers worldwide.

The sale, which an Airbus official said should be concluded by mid-2015, does not include Airbus’ mobile satellite services sales to government customers, which has accounted for a minority of the ex-Vizada portfolio. The Airbus official said assuring growth in the commercial segment of the satellite services business would require a large investment that the company is not ready to make.

The official said the estimated annual revenue of all the businesses to be sold is about 2 billion euros ($2.6 billion), not all of which is currently found in Airbus’ accounts because some of them are operated outside Airbus’ financial statements. Airbus Defence and Space has annual revenue of around 14 billion euros.

“Given the tight budgetary situation in our home countries and increasing competition on global markets, the portfolio review is an essential element to further develop our defence and space business and ensure its competitiveness,” Airbus Defence and Space Chief Executive Bernhard Gerwert said in a statement.

In addition, Airbus said it will explore “further industrial alternatives” for its Security and Defense Electronics businesses.