Global Eagle Entertainment (NASDAQ:ENT), otherwise known as GEE, has now completed their previously announced acquisition of Emerging Markets Communications ("EMC"), a a firm that provides maritime and hard-to-reach land markets communications.
The combination of GEE and EMC creates one of the world's largest providers of satellite-based connectivity and media to the rapidly growing global mobility market. When combined with EMC, GEE benefits from significant economies of scale and an enhanced global infrastructure that enables it to deliver a comprehensive portfolio of products to customers. With this combo, GEE possesses a number of attributes that are expected to drive revenue growth and operational efficiencies, including:
- An unparalleled portfolio of products and services tailored to mobility markets, including global connectivity, media content in 47 languages, live television, travel and entertainment apps, user interface platforms and data capture and operations analytics tools
- A global sales force and support organization that reaches all major mobility verticals including aviation, maritime, energy and remote locations
- Proprietary, patented technologies that enhance the connected traveler's user experience and reduce costs across market verticals
- A diversified revenue base with over 400 customers, balanced between media and connectivity, and over half of all revenue coming from international markets
- Engineering, technical and managerial resources to effectively drive new product development, program management, product maintenance, and field support
With EMC, GEE expects to realize synergies of $15 million in 2017, growing to $40 million in 2018 and thereafter. A major source of savings is expected to come from network efficiencies, including the ability to optimize bandwidth costs through a consolidation of existing network assets, including space segment and ground infrastructure as well as better capacity utilization. Additional savings are also expected through reductions in SG&A spending and the consolidation of facilities.
Driving sales of GEE's media, software, advertising and operations solutions products in the underserved maritime market are a key objective of the company. GEE's digital media team has had a long-term relationship with EMC and expects to launch new products to major cruise lines before year's end. EMC's proprietary technologies are already in use today and improve the connectivity experience and optimize bandwidth usage in the maritime market. GEE will soon introduce these technologies into the aviation market.
Dave Davis will continue to lead GEE as CEO. Abel Avellan, founder and CEO of EMC, will serve as President and Chief Strategy Officer of GEE. As part of the transaction, ABRY Partners, EMC's largest shareholder, has a right to nominate a director to GEE's board. In conjunction with the close of this transaction close, GEE has established three operational business units.
- The Media Business Unit delivers films and television shows, live TV, music, games and other content to aviation and maritime customers, including approximately 6,500 aircraft and many cruise ships currently served by GEE. Other products include digital and streaming media offerings such as the Airtime Content-to-Go application and the Entice streaming media system. Wale Adepoju will lead the Media Business Unit as Executive Vice President of Media. Previously, Wale served as Chief Commercial Officer of GEE.
- The Aviation Business Unit serves commercial airlines and private aviation using GEE's proprietary Airconnect GlobalTM connectivity platform, which is currently installed on nearly 750 aircraft worldwide. The Business Unit also provides Navaero electronic flight bag (EFB) data interfaces and powered mounting systems, which are in place on nearly 4,000 aircraft today, as well as Masflight operational data analytics services. Joshua Marks, who previously led GEE's Operations Solutions team, will lead the Aviation Business Unit as Executive Vice President of Aviation.
- The Maritime and Land Business Unit delivers connectivity and mission critical services to cruise and ferry lines, yachts, commercial shippers and land-based users such as non-governmental organizations and mobile network operators. Through this transaction, GEE has acquired a strong maritime customer base, serving over 1,500 vessels and 100,000 cruise ship cabins. In addition to overseeing certain corporate functions at GEE, Abel Avellan will lead the Maritime and Land Business Unit.
GEE Chief Executive Officer Dave Davis commented that this is a transformational acquisition for his company and for the industry. The combination of GEE and EMC will provide customers with a breadth of products and services unmatched in the markets we serve, whether in the air, at sea, or on land. GEE will continue to strive to be customer focused, product driven, and operationally excellent.
