Technology, Media & Telecoms
$2.6bn
Netherlands NLD

Scope of intervention

Sycomore Corporate Finance acted as financial advisor to O3b Networks Board of Directors

Date of closing

August 2016
Following the 29 April 2016 announcement that SES S.A. (NYSE Euronext Paris and Luxembourg Stock Exchange: SESG) had agreed to increase its interest in O3b Networks (O3b) to 50.5% in order to take a controlling share in the company, SES announces that it is launching a capital raising to fund the acquisition of the remaining shares in O3b Networks.

As a result, SES will own 100% of O3b Networks, a next generation satellite operator with a
constellation of 12 High Throughput Satellites (HTS) at Medium Earth Orbit (MEO) that delivers a
unique, global ‘fiber in the sky’ connectivity solution with ultra-low latency.

O3b is a game-changing acquisition and a major step in the execution of SES’s differentiated strategy enhancing existing video and data capabilities. The combination of SES’s global geostationary (GEO) satellite network with O3b’s global MEO satellite constellation will enable SES to provide major customers in the Enterprise, Mobility and Government market verticals with an unsurpassed satellite-enabled network, complemented by a robust ground network and innovative products.

The transaction is expected to generate a return (pre-synergies) in excess of SES’s hurdle rate for infrastructure investments. In addition, SES expects to generate €53m of annual commercial, operational, product development and financial synergies in 2017, increasing to €106m annually by 2021. With the benefit of commercial and financing synergies, the acquisition is now expected to become free cashflow (before financing activities) and EPS accretive to SES in 2018.

Rationale

  • Expand SES’s global network and solutions by leveraging on the capabilities and features of the combined fleets
  • Support SES’s differentiated strategy enhancing existing video and data capabilities
  • Benefit from operational, product development and financial synergies

SES at a glance

SES (NYSE Euronext Paris and Luxembourg Stock Exchange: SESG) is a Luxembourg based satellite operator with a fleet of more than 50 satellites in Geostationary Earth Orbit (GEO) and 12 in Medium Earth Orbit (MEO). SES focuses on value-added, end-to-end solutions in four key market verticals (Video, Enterprise, Mobility and Government). It provides satellite communications services to broadcasters, content and internet service providers, mobile and fixed network operators, governments and institutions, and businesses worldwide. SES’s portfolio includes the ASTRA satellite system, which has the largest Direct-to-Home (DTH) television reach in Europe.

O3b Networks at a glance

Netherlands-based company which provides satellite services through a fiber based satellite network. The O3b system combine the global reach of satellite with the speed of a fiber‐optic network through nearly 180 countries with low‐cost, high‐speed, low latency Internet and mobile connectivity.
Since beginning commercial operations in September 2014, O3b has built a strong global customer base and now serves over 40 Enterprise, Mobility and Government clients across 31 countries. O3b is expected to generate more than USD 100m of revenue for the twelve months ended 31 December 2016, which represents nearly double the revenue recorded in the previous year.