Gogo strikes strategic move to bolster aviation connectivity with Satcom Direct acquisition
September 30, 2024
In a significant move to expand its foothold in the aviation connectivity market, Gogo has announced the acquisition of Satcom Direct (SD).
Gogo’s announcement, which came as a surprise for many, was made earlier in the day on Monday 30 September. The move will see Gogo leveraging SD’s cutting-edge satellite communication technologies to enhance its existing inflight connectivity services. A global provider of seamless connectivity solutions and data services, SD generates approximately 80% of its revenue from business aviation, while much of the remaining 20% is from the military/ government mobility market.
The US$375 million cash deal, which will also see SD receive five million shares of Gogo stock at closing and the potential for additional consideration capped at US$225 million, marks a pivotal moment in the industry. It combines two major players in the satellite communications and aviation markets to create a more comprehensive suite of services.
Expanding global reach
Gogo chairman and CEO, Oakleigh Thorne, commented: “The transaction accelerates our growth strategies of expanding our total addressable market to include the 14,000 business aircraft outside North America and delivering solutions that meet the needs of every segment of the business aviation market.”
SD’s existing footprint in Europe, the Middle East, Africa and Asia complement’s Gogos’ established presence in North America.
With its extensive international footprint, SD is a leading global business aviation geostationary (GEO) satellite inflight connectivity service provider. In 2024 the business is expected to generate US$485 million in revenue with EBITDA margins of approximately 17% on a pro forma adjusted basis.
In addition to establishing an integrated GEO-LEO satellite solution for the business aviation sector Thorne added, “the transaction also uniquely positions us to sell our Galileo LEO solution integrated into SD’s GEO and L-band offerings as part of a multi-band, multi-orbit solution for the fast-growing military/ government mobility market.”
Chris Moore, Satcom Direct president, added that his business was thrilled to be joining forces with Gogo. “Our businesses have highly complementary core competencies and our combined financial strength and expertise unlocks opportunities to invest in new technology and deliver significant long-term value creation,” he remarked
Competitive advantage
The deal positions Gogo to compete more effectively against other aviation connectivity providers, such as Viasat and Intelsat. By integrating SD’s satellite technology and expertise within its offering, Gogo will not only enhance its service capabilities, but will also open doors to new opportunities in business and government aviation sectors.
Subject to regulatory approvals, the transaction is expected to close by the end of 2024.
