TAMPA, Fla. — Satellite operator Orbcomm said May 10 it did not get any alternative proposals in its 30-day “go-shop” period, which followed private equity firm GI Partners’ $1.1 billion acquisition offer.
The company, specializing in connecting industrial monitoring devices, said it engaged with more than 50 parties that it thought might be interested in a deal.
New Jersey-based Orbcomm is now under “no-shop” restrictions, limiting its ability to find alternative deals as the GI Partners transaction moves toward closing in the second half of 2021.
The sale, which will take Orbcomm off the Nasdaq stock exchange, still requires shareholder and regulatory approvals.
Raymond James analyst Ric Prentiss downgraded Orbcomm’s shares to ‘underperform’ from ‘strong buy’ after its fruitless search for an alternative deal.
Orbcomm reported revenues down to $63.7 million for the first three months of 2021, compared with $66.2 million for the corresponding period in 2020.
Adjusted EBITDA, or earnings before interest, taxes, depreciation and amortization, fell to $13.5 million compared with $13.7 million.
However, the company also added 50,000 net subscribers, and said product sales increased 1.1% to $25.9 million compared with the first quarter of 2020. Product sales were up 5.1% compared with the last quarter of 2020.
“We’re pleased with our first quarter results with Revenues coming in as expected while navigating through a global component supply shortage,” Orbcomm CEO Marc Eisenberg said in a statement announcing the results April 29.
“We’re continuing to see customer demand return to normalized levels as evidenced by the 87,000 devices we shipped in the quarter. This resulted in year-over-year and sequential growth in product sales. With the integration work now behind us, we believe the Company is well-positioned to capitalize on strong tail winds in the industrial IoT market.”
The fast-growing market for connecting IoT (internet of things) sensors is attracting a flurry of startups, looking to deploy low-cost solutions with relatively inexpensive satellites.
Orbcomm is locked in a regulatory tussle with one of these companies, U.S.-based startup Swarm Technologies that is sharing its spectrum to expand internationally.
Orbcomm is challenging a letter from the U.S. Federal Communications Commission (FCC), sent March 10, that aimed to clarify how they will share Very High Frequency (VHF) spectrum.
The 28-year old company said the letter is procedurally and substantively defective, calling on the FCC to rescind and review it.
Silicon Valley-based Swarm, which got its FCC license in January 2019, said the move aims to confuse international regulators and slow down its expansion.
The FCC has yet to weigh in since Swarm responded April 26 to Orbcomm’s petition.
Meanwhile, Luxembourg startup OQ Technology said May 10 it has ordered a second satellite from NanoAvionics to connect IoT devices to 5G technology.
Lithuania-based NanoAvionics will build, integrate and operate a 6U nanosatellite called Tiger-2 for a launch this year.
“Tiger-2 is an example of a NewSpace startup breaking barriers and racing with time to get to orbit within a few months, while using an agile approach to quickly deliver 5G connectivity,” OQ Technology founder and CEO Omar Qaise said in a statement.
OQ Technology has a multi-launch deal with ride-share specialist Spaceflight.