BETHESDA, Md. – Stratos Global Corp. (TSX: SGB), a global provider of mobile and fixed-site remote communications solutions, has signed a letter of intent to purchase the shares of Xantic B.V., the company reported in a recent statement.
This transaction will give Stratos a significantly expanded geographic presence and customer base in the Americas, Europe and the Asia-Pacific region.
Under the terms of the agreement, Stratos will acquire 100 percent of Xantic, jointly owned by KPN N.V. (65 percent) and Telstra Corporation Ltd. (35 percent), for a purchase price of approximately US$191 million. The purchase price is subject to adjustment based upon audited EBITDA (defined as operating income before interest expense, income taxes, depreciation and amortization, and other (income) costs) for the 12 months immediately preceding closing and specified working capital levels.
Xantic, with 2004 revenue of approximately US$172 million, employs 270 people worldwide and operates two Inmarsat Land Earth Stations in Burum, Netherlands, and Perth, Australia. In addition, Xantic has been selected by Inmarsat to host the new Satellite Access Station for the next-generation Inmarsat BGAN (Broadband Global Area Network) service, slated for commercial launch later this year.
The acquisition allows for the combination of Stratos’ presence in the Government and Military, Energy and Leasing sectors and Xantic’s position as a provider to the Maritime and Carrier sectors.
“For some time, we’ve anticipated consolidation in the mobile satellite services sector, and our strategy has been focused on ensuring that Stratos leads that consolidation,” said Jim Parm, Stratos’ president and chief executive officer. “Today, I’m pleased to announce that we have successfully executed on that strategy. With the acquisition of Xantic, we will be even better positioned to deliver enhanced service for our customers and additional value for our shareholders.”
The acquisition is subject to competition clearances in Australia and Norway, and is expected to close in late 2005 or early 2006, according to the company.
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