Speedcast International Limited (ASX: SDA) (“Speedcast”)has announced that on December 14, 2018, the firm completed the acquisition of Globecomm Systems Inc. (“Globecomm”) for cash consideration of $134 million (net of cash acquired).
Globecomm has a multi-network infrastructure in over 100 countries and the acquisition strengthens Speedcast’s global leadership enhanced competitive positions in Government, Maritime, and Enterprise. The acquisition complements Speedcast’s acquisition of UltiSat in November of 2017 by doubling the company's revenue in the Government sector and adding more scale, visibility and capabilities in this growth market. In addition, Globecomm will benefit from Speedcast’s scale and capabilities in the Maritime and Enterprise sectors.
Speedcast is confident of achieving a targeted US$15 million in annual cost synergies within 18 months of completing the acquisition, as communicated previously. The cost synergies are expected to be generated across the business, including through footprint rationalization, network improvements and improved procurement.
Executive Comment
Speedcast CEO Pierre-Jean Beylier said that the acquisition of Globecomm fits perfectly with Speedcast’s strategy to build competitive advantages based on scale, reach and unique capabilities. Globecomm is particularly complementary as it significantly strengthens the firm's Government division at a time when government spending globally is expected to rise. Globecomm also has a strong reputation providing remote communications and professional services to key customers in Maritime and Enterprise and will strengthen the firm's innovation capabilities with new solutions and strong engineering expertise in growth areas such as IoT, wireless and media services. I welcome the Globecomm team to Speedcast and look forward to their contribution to Speedcast's journey.
