Orbcomm, a satellite provider that connects industrial tracking systems, is being bought by private equity company GI Partners for $1.1 billion, comprising net debt. Orbcomm completed two years of fiscal optimization activities after making a number of acquisitions to invest in the commercial internet-connected computer as well as machine-to-machine (M2M) communications markets. Orbcomm Chief Executive Officer Marc Eisenberg stated, “The alliance with GI Partners would provide us with the ability to advance our long-term plan quickly.”
“As a privately owned business, GI Partners has a proven track record of partnering with businesses to fuel development, and we hope to continue to drive creativity, delivering world-class service to our global clients, and extending our share of the market in the industrial IoT.” Orbcomm creates technologies that bind companies to their properties to improve visibility and performance. The New Jersey-based firm extended a strategic alliance with British satellite provider Inmarsat to establish an Internet of Things (IoT), telematics, as well as other devices until at least 2035 in October 2020.
The firm has been busy developing trailer products to expand the supply of components that sustain COVID-19 vaccine deliveries, which accounts for around 25% of Orbcomm’s sales. Following the damage caused by the COVID-19 pandemic, the organization posted gross sales of $248.5 million in the year 2020, down from $272 million in the year 2019. In 2020, modified EBITDA (earnings before interest, taxes, depreciation, and amortization) fell to $54.8 million from $63.1 million in the year 2019.
Orbcomm stockholders would receive $11.50 in cash for every share as part of the transaction with GI Partners of California, which marks a 52 percent premium on the operator’s closing share price on 7th April, the day before the release. Orbcomm will exit the Nasdaq stock exchange in the second part of 2021, as the deal is expected to end. Orbcomm, on the other hand, said it would look for a different buyer during a “go-shop” time that ends on May 7, 2021.
Since 2001, GI Partners has been able to raise over $26 billion to invest in businesses. The private equity group invests in data technology companies, mainly in the healthcare, IT infrastructure, services, as well as tech industries. Orbcomm’s communications services are provided by a set of high frequency (UHF) OG2 satellites in the low-Earth orbit (LEO). The corporation also uses them to offer Automatic Identification System (AIS) navigation as well as maritime protection facilities. For low-data-rate, two-way communications in the remote areas, it utilizes Inmarsat’s L-band satellites in the geostationary (GEO) orbit.