TAMPA, Fla. — Satellite communications equipment maker SatixFy said March 8 it has agreed to go public by merging with a special purpose acquisition company, shrugging off market uncertainty that helped dash weather startup Tomorrow.io’s SPAC plans the day before.
Israel-based SatixFy expects to raise up to $230 million in gross proceeds by merging with Endurance Acquisition Corp, depending on how many of the SPAC’s shareholders ask for money back ahead of closing the deal this year, instead of shares in the combined company.
Endurance was created as a shell company last year by New York-based private equity firm Antarctica Capital. The blank check firm raised about $200 million by listing shares on the Nasdaq Capital Market Sept. 15, under the ticker symbol ‘EDNCU’.
In addition to cash Endurance raised by selling shares, the combined entity also aims to receive around $29 million through a private investment in public equity — or PIPE — funding round from Antarctica Capital and China-based asset manager Sensegain Group.
Antarctica Capital first signaled its push into the space industry last year when it formed EarthDaily Analytics, a Canadian optical satellite imagery provider, after buying parts of UrtheCast that sought creditor protection in 2020 to avoid bankruptcy.
Established in 2012, SatixFy develops satellite antennas, terminals and modems that are based on semiconductors it develops in-house.
Canadian satellite operator Telesat said Dec. 1 that SatixFy will provide modems for the 288 landing station antennas it envisages for Telesat Lightspeed, its planned low Earth orbit broadband (LEO) constellation.
In March 2021, SatixFy announced an agreement to provide in-flight connectivity terminals for LEO operator OneWeb. Singapore-based satellite communications specialist ST iDirect and Europe’s Airbus are also among its customers, according to SatixFy.
“We have high visibility to at least $40 million in 2022 revenue from contracts with existing customers,” SatixFy co-founder and CEO Yoel Gat said in a statement.
“With the addition of the new available funds from this transaction, the company is targeting strong business expansion, which will result in strong revenue growth with profitability expected in 2023 and beyond.”
SatixFy forecasted revenues to grow from $22 million in 2021 to $374 million in 2026 in an investor presentation.
Gat said the company’s vertically integrated organization structure will enable it “to quickly grow in what we see as a $20 billion 2029 market opportunity across several segments, including both ground terminals and payloads for Low Earth Orbit (LEO) broadband satellites, as well as commercial and business aircraft.”
Gat also founded Gilat Satellite Networks in 1987, and helped the Israeli company list on the Nasdaq stock exchange in 1993 before departing as chair and CEO in 2003.
Alongside the SPAC merger, SatixFy said it recently received a committed equity facility worth $75 million from an affiliate of U.S. investment firm Cantor Fitzgerald, and a $55 million loan from Californian private equity firm Francisco Partners.
SatixFy said the SPAC deal values the combined company at about $813 million.
Tomorrow.io staying private
Many space companies that went public in the last year through SPAC mergers have suffered sharp share price declines, and corresponding valuations, as they work toward ambitious growth targets.
Souring investor sentiment has led to high redemptions rates from SPAC shareholders for certain mergers in the space industry.
A number of SPAC mergers have also been called off as financial market uncertainty is compounded by mounting geopolitical tensions and the potential for rising interest rates.
Plans to merge Boston-based Tomorrow.io with Pine Technology Acquisition Corp. became the latest casualty in the SPAC market March 7, when they said the deal is being canceled “due to market conditions.”
Tomorrow.io announced the SPAC merger Dec. 7 just three months earlier, as part of plans to raise up to $420 million for a constellation of weather satellites.
Dan Slagen, Tomorrow.io’s chief commercial officer, said the “timeline and capabilities” for around 32 small satellites with storm-tracking radars for improving weather forecasts remain intact.
“Our mission does not change and neither do our growth plans,” Slagen said in a March 8 email.
Tomorrow.io has previously said California-based Astro Digital is building the first two spacecraft for a launch in late 2022.
In March 2021, Tomorrow.io said it had received $77 million through a funding round led by private equity firm Stonecourt Capital to fund its expansion plans.
Tomorrow.io currently uses data from NASA’s Global Precipitation Measurement (GPM) satellite and other sources to provide analysis to Uber, Delta, and other companies affected by weather patterns.
The company recently reported $19 million in sales for 2021, compared with $7.4 million in 2020.
“While we had better than projected 2021 results and are off to a strong start in 2022, the current market would add unreasonable risk to our company,” Tomorrow.io CEO Shimon Elkabetz said in a March 7 LinkedIn post.
He added: “We look forward to our next phase of growth, revisiting public market options in the future and exploring partnership opportunities that presented themselves over the course of the last year.”
Tomorrow.io agreed to pay Pine Technology Acquisition Corp $1.5 million as part of their merger termination agreement, according to filings with the Securities and Exchange Commission.
Pine Technology Acquisition Corp. said it “intends to continue to pursue the consummation of a business combination with an appropriate target.”