Canada’s MacDonald, Dettwiler and Associates Ltd. [MDA], last week said it signed an agreement to acquire 100 percent of Space Systems/Loral Inc. (SS/L) for $875 million in a transaction that is immediately accretive.
The acquisition transforms MDA into a major player in commercial communications and provides the company with critical mass in the U.S. market. SS/L, headquartered in Palo Alto, Calif., is the global market leading provider of commercial communications satellites, serving a global customer base
“This is a game changing transaction for our company,” said Daniel Friedmann, MDA’s president and CEO. “With one move, we are bringing together two market leaders to create a unique global communications and information company with a strong commercial focus. Post-acquisition, more than two-thirds of MDA’s total revenues will come from the commercial market.”
The transaction meets MDA’s long-term objective of gaining a stronger presence in the U.S. market. SS/L has a U.S.-based workforce of 3,200 highly skilled employees, and over one million square feet of state-of-the-art facilities. SS/L will continue to operate under its well-established brand and proven management team.
“The combination of Space Systems/Loral’s world-class commercial communications expertise with MDA’s strengths in essential information solutions provides exciting opportunities for growth for the new company and continuous strong support to our current and future customers’ business,” said John Celli, president of Space Systems/Loral.
Following the acquisition, MDA will have combined annual revenues of $1.9 billion–calendar year 2011–and a combined backlog of $2.8 billion–March 31, 2012. The acquisition is also expected to provide global opportunities for future growth as MDA enters markets fueled by some of today’s most compelling consumer communications needs.
The agreement is also subject to applicable regulatory approvals and certain customary closing conditions. Subject to satisfying those approvals and closing conditions, the transaction is expected to be completed in a few months.
BofA Merrill Lynch is acting as lead financial adviser to MDA in connection with the transaction. RBC Capital Markets also provided financial advice to MDA related to this transaction.