Airplane Internet Provider Gogo Sells Commercial Aviation Business to Intelsat
Posted on 09/01/2020
Gogo is the inflight internet company that offers WiFi for a cost for air travelers. Gogo is selling its Commercial Aviation (CA) business to Intelsat S.A. (Intelsat) for US$ 400 million in cash, subject to customary adjustments. The Gogo Board of Directors has approved the transaction. Intelsat expects to finance the transaction utilizing cash on hand and borrowings under its US$ 1 billion debtor-in-possession credit facility and has obtained support from key economic stakeholders, as well as approval from the U.S. Bankruptcy Court for the Eastern District of Virginia, Richmond Division, to complete the acquisition. The transaction, which is expected to close before the end of the first quarter 2021, remains subject to customary closing conditions and certain regulatory approvals. Intelsat is the world’s largest global satellite operator
Gogo will remain a public company.
As part of the deal, Gogo will enter into a 10-year network services agreement under which Intelsat will have exclusive access to Gogo ATG services for the CA market in North America, subject to minimum revenue guarantees of US$ 177.5 million. Intelsat intends to operate the Commercial Aviation business as an independent business unit, led by current CA President John Wade. The Commercial Aviation business will remain based in Chicago.
BDT & Company served as primary financial advisor to Gogo, J.P. Morgan and Morgan Stanley & Co. LLC served as financial co-advisors, and Debevoise & Plimpton LLP served as legal advisor.