WASHINGTON — Satellite connectivity provider Global Eagle Entertainment on March 8 announced $150 million in fresh capital from a private investment firm and the appointment of its second chief executive in 13 months.
Global Eagle CEO Jeff Leddy, who is shifting to the role of executive chairman, said the “investment will significantly strengthen our liquidity and create a capital structure to support our growth initiatives, positioning us to deliver significant long-term shareholder value.”
Searchlight Capital Partners, a U.K.-registered investment group with offices in Toronto and New York City, placed the $150 million investment.
Los Angeles-based Global Eagle said it will use the new capital to pay off a $78 million credit-line balance, and the remainder for “growth initiatives and other general corporate purposes.” Around $8 million will go to fees and expenses related to the transaction.
Global Eagle said it will have access to the full $85 million credit line following the payment.
Leddy will be replaced as CEO on April 1 by Josh Marks, Global Eagle’s executive vice president for connectivity. Marks joined Global Eagle in 2015 when the company bought masFlight, an aviation data-analytics company he co-founded and led as CEO.
“[Marks] is the right person to lead our global team to achieve greater success for our customers, employees, and stakeholders,” Leddy said in a statement. “The Board and I are confident this will be a seamless transition.”
Leddy is replacing Ed Shapiro, Global Eagle’s outgoing board chairman. The company did not specify Shapiro’s reason for leaving.
Leddy was appointed CEO of Global Eagle in February 2017 following the abrupt resignation of previous CEO Dave Davis and Chief Financial Officer Tom Severson. Global Eagle hired Harris Caprock’s CFO, Paul Rainey, to replace Severson two months later.
Global Eagle filed late financial reports to the the U.S. Securities and Exchange Commission in January, blaming challenges in integrating recent acquisitions like EMC in May 2016. Three class-action lawsuits followed, of which two were voluntarily dismissed by plaintiffs and one by the U.S. District Court for the Central District of California.
Leddy said this February that the completed SEC documents, “validated the integrity of our financials, and confirmed our position that the company was not subject to any restatements, was not a perpetrator of fraud, and did not commit any other wrongdoing.”