Satellite player GlobalStar is diversifying its infrastructure position in a $1.65 billion transaction with Thermo Acquisitions that will combine satellite spectrum with fiber assets and investments in CenturyLink and other telecom-focused companies.
GlobalStar will merge with Thermo Acquisitions as well as fiber provider FiberLight into a new entity called Thermo Companies that will also own assets including 15.5 million shares of CenturyLink’s common stock, $100 million in cash and “minority investments in complementary businesses” and additional assets of $25 million. FiberLight has about 14,000 route miles of fiber, according to the companies, and minority investments including Pivotal Commware, which focuses on holographic beamforming for next-generation antenna systems.
In an announcement of the transaction, GlobalStar said that the new company will have a “portfolio of assets that supports the needs of next-generation networks including connectivity everywhere, dense small cell deployments, dedicated licensed spectrum and [a] deep fiber footprint.”
All three companies are controlled by telecom investor Jay Monroe, who is CEO of GlobalStar and executive chairman of its board; and founder and controlling shareholder of Thermo, which backs FiberLight. He told The Wall Street Journal that the combined company will seek to work with mobile network operators to leverage its spectrum assets, which include both domestic and international holdings.
“If they’re looking for global spectrum assets, Globalstar becomes a one-stop shop for them,” Monroe was quoted as saying.
In a statement on the merger transaction, Monroe said, “This transaction brings together strategic assets that are critical to the complex needs of next-generation networks, allowing service providers to deliver the sophisticated services their customers increasingly expect. The combined entity is uniquely positioned to meet a broad range of customer requirements, from low latency and high capacity networks, to consistent connectivity across large geographical areas. Long-term shareholders should benefit significantly from the combined entity’s strong balance sheet and recurring revenue from the portfolio of satellites, spectrum, fiber infrastructure and other related assets.”
GlobalStar’s stock was up more than 5% on the news. The transaction is expected to close in the third quarter.
