Gogo is officially out of the commercial aviation in-flight connectivity business. The company closed its $400 million cash transaction with Intelsat early Tuesday morning, making good on a promise from two weeks ago to complete the deal in early December.
Combining Intelsat’s next-generation global telecommunications network with Gogo Commercial Aviation’s leading capabilities and airline relationships will create unprecedented innovation in inflight digital connectivity, unlocking exciting new growth and brand loyalty opportunities across the airline industry.– Intelsat Chief Executive Stephen Spengler
The culmination of this transaction further propels Intelsat into vertically integrated managed mobility services, and deeper into the growing inflight connectivity market. Broadband connectivity for nine of the top 20 global airlines and an installed base of more than 3,000 commercial aircraft are now part of Intelsat’s portfolio of services.
In conjunction with the deal closing Intelsat announced three major leadership changes.
- John Wade remains president of the Commercial Aviation division, now owned by Intelsat. In this role, he will manage all aspects of the business, including product, sales, account management, quality and service delivery.
- Jon Cobin takes over as Intelsat’s Chief Strategy Officer, leading the company’s corporate strategy and business development efforts. He served a similar role at Gogo prior to the transaction.
- Bruno Fromont becomes Intelsat’s Chief Technology Officer. He will lead spectrum strategy, asset planning, product development and innovation.
Intelsat CEO Stephen Spengler is optimistic on the opportunity for the commercial aviation portfolio to grow under the new ownership:
Demand for inflight broadband is expected to grow at a double-digit rate over the next decade, and we remain committed to long-term success in broadband mobility services… Our ability to initiate, execute and rapidly finalize this transaction demonstrates the forward momentum that Intelsat has maintained over the course of this year.
Gogo will now redouble its efforts on the business aviation market. As President and CEO Oakleigh Thorne explains, “We are a leader in business aviation and now turn our singular focus toward serving that attractive market. Our business aviation division has proven resilient in the face of the COVID-19 pandemic, as the number of business aircraft online today has nearly returned to January levels.”
Gogo also notes it holds approximately $460 million cash following the closing, with net debt of $770 million. The company next strategic initiative will be a refinancing of its 2022 notes, ideally prior to the first call in May 2021.
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