Gilat will acquire ESA-maker Stellar Blu, continuing the consolidation trend in the inflight connectivity world. The deal, expected to close in the back half of 2024, includes an initial payment of $98 million, plus up to $147 million subject to reaching certain post-closing goals.
The acquisition is a major milestone in Gilat’s growth strategy to expand its business further into the IFC market. Moreover, we believe that with Gilat’s global reach, we can bring Stellar Blu’s innovative solutions to other high-end mobility markets in need of an ESA solution.
– Adi Sfadia, Gilat’s CEO
Gilat is no stranger to the ESA world. The company has worked with multiple partners in developing and commercializing the technology, though its focus to date has mostly been on smaller terminals for business aviation. With Stellar Blu’s Sidewinder now part of its portfolio Gilat extends its reach in the market, including a significant backlog in the commercial aviation world.
Speaking to that portfolio integration, Stellar Blu CEO Tracy Trent notes, “We believe Stellar Blu’s innovative open architecture products, and significant leadership within the IFC market will strongly enhance Gilat’s strategy in this sector.” Stellar Blu had also been working directly to push its ESA solution in the BizAv market. Bringing Gilat’s expertise in that segment to bear should help improve the opportunities for growth.
Stellar Blu is the supplier of choice for Intelsat and Panasonic Avionics as the two companies pursue multi-orbit solutions for airlines. Alaska Airlines, Air Canada, American Airlines, Aerolineas Argentinas, and Japan Airlines have all committed to the Stellar Blu terminal on at least some of their planes.
With that backlog, and its renewed marketing efforts as a combined operation, Gilat anticipates 500-1000 installations annually for the terminal. The company is particularly bullish on the government and defense segment for growth, as well as land mobility.
That translates to anticipated annual revenues from the acquired business reaching $100-150 million from 2025.
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