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Eutelsat targets Latin America with US$1.14bn Satmex deal

eutelsatEuropean satellite operator Eutelsat has agreed to by 100% of Satélites Mexicanos (Satmex) for US$1.142 billion (€861 million) as it looks to up its presence in the Latin American market.

Eutelsat said that the deal, together with the recently ordered Eutelsat 65 West A satellite, will position the firm “as a major satellite operator in Latin America,” and reflects its strategy to expand in high growth markets.

“With Satmex’s strategic orbital slots, state of the art fleet and upcoming satellites, Eutelsat is gaining a robust platform from which to access the significant opportunities in this region,” said Eutelsat CEO Michel de Rosen.

Satmex is based in Mexico and operates three satellites – Satmex 6 at 113.0° west, Satmex 5 at 114.9° west and Satmex 8 at 116.8° west that cover 90% of the population of the Americas. It has frequency rights in C and Ku-bands and was granted Ka-band rights in 2012 and currently has has an 11% market share in Latin America, according to Eutelsat.

Eutelsat agreed to buy Satmex for US$831 million and take on its US$311 million net debt, giving the deal an enterprise value of US$1.14 billion. Eutelsat said the agreement will benefit its top-line growth. Satmex’s fixed service satellite business generated revenues of US$111.8 million and adjusted EBITDA of US$89.1 million last year.

“Our fleet will provide Eutelsat with a unique strategic opportunity to enter the fast-growing Latin American market and obtain premier orbital locations across the continent. Our clients will benefit from the integration of our network into Eutelsat’s world-class satellite fleet and operations,” said Satmex CEO, Patricio Northland.

The news comes a day after Eutelsat reported revenue for the year ending 30 June of €1.284 billion, up 5.1% year-on-year. EBITDA came in at €995.3 million, up 4% year-on-year.

“Our industry is continuing to grow, albeit at a lesser pace than in the past decade. Several markets are still developing at a high pace – notably Russia, Central Asia and Africa, where we already enjoy strong positions, and Asia Pacific and Latin America, where we are actively developing our footprint,” said de Rosen.

The Satmex deal is expected to close by the end of the year, subject to government and regulatory approvals.