EADS Agrees To Purchase Inmarsat Distributor Vizada

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PARIS — European aerospace giant EADS on Aug. 1 said it is purchasing Vizada of France, the second-largest distributor of Inmarsat mobile satellite services, in a transaction valued at $960 million that gives EADS’s Astrium Services division a major stake in L- and Ka-band mobile satellite systems alongside its established X-band capacity business for military users.

Industry officials have been saying for several months that private-equity investor Apax France was looking to cash out of its majority stake in Vizada. Vizada’s chief executive, Bruno Ducharme, resigned in mid-July and was replaced by Rafi Kouyoumdjian. Apax purchased Vizada in late 2006.

Paris-based Vizada is second only to Stratos Global of Bethesda, Md., in the revenue it generates from L-band mobile satellite services provided by London-based Inmarsat’s fleet of satellites.

Vizada, which also distributes services from Iridium Communications and other mobile satellite operators, is expected to report $660 million in revenue for 2011, EADS said in its Aug. 1 statement. Vizada’s EBITDA, or earnings before interest, taxes, depreciation and amortization, is expected to be $95 million in 2011, or 14.4 percent of revenue.

Vizada and Stratos together account for a little more than two-thirds of London-based Inmarsat’s total revenue for mobile maritime, land-based and aeronautical satellite services. Both have been branching out to include Ku-band satellite service from fixed satellite services fleet operators as their customers seek faster data communications links.

Ku-band terminals placed aboard maritime vessels represent a recent expansion of business for the world’s established satellite operators as the lines between fixed and mobile bandwidth are blurred by advances in VSAT, or very small aperture terminal, technology. Ku-band VSAT systems are usually able to offer more bandwidth, at a substantially lower price per delivered megabit, than Inmarsat’s traditional L-band service.

The threat of VSATs to its traditional maritime business is one reason Inmarsat is investing in Ka-band satellites. Inmarsat’s three Global Xpress Ka-band satellites are scheduled for launch in 2013 and 2014.

Vizada and other Inmarsat service providers have begun offering customers packages that bundle VSAT and Inmarsat links for maritime customers and include options for upgrading to either Global Xpress or to another Ku-band service.

Inmarsat has offered its own Ku-to-Ka-band upgrade through Stratos Global and ShipEquip of Norway, both of which are owned by Inmarsat. Industry officials have said an Inmarsat purchase of Vizada would face opposition from government regulators given Inmarsat’s previous purchase of Stratos.

Astrium Services owns Paradigm Secure Communications of Britain, which is under a long-term contract to provide beyond-line-of-sight communications services to the British Defence Ministry. As part of this contract, Astrium has purchased and launched the Skynet 5 military telecommunications satellites, which use mainly X-band frequency to serve British forces and NATO, as well as several other allied military services.

Astrium’s purchase of Vizada will add L-band and, starting in 2013 with Inmarsat Global Xpress, Ka-band to the Astrium Services portfolio. The U.S. military is moving toward Ka-band for some of its future mobile communications needs as it seeks higher-speed communications links. Inmarsat — with its partner and Global Xpress satellite builder, Boeing — has targeted the U.S. military as a major future customer for the service.

 

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