The Space Investor - 🚀 DISH & DirecTV (Finally) Merge

Market Max-Q

Top Stories

• In what is a doozy of a deal, PE firm TPG will acquire AT&T's ($T) 70% ownership stake of DirecTV for $7.6B cash and merge it rival Dish. In a separate deal, EchoStar ($SATS) will sell Dish in a $9.8B debt deal at the purchase price of $1 for taking on ~$10B of its debt.
   
• The two companies have been trying to merge for decades, after a 2002 attempt was ended by an antitrust lawsuit.
   
• The merger depends on an agreement with bondholders to write off about $1.6B of the Dish obligations as well as approval from multiple federal regulators.
   
• $SATS shares were down -12% on the news and finished the week -17%.

• The acquisition will create an in-flight connectivity provider with the ability to satisfy every segment of business aviation (BA) and military/government mobility markets.
   
• “This transaction accelerates our growth strategies of expanding our total addressable market to include the 14,000 business aircraft outside North America," said Gogo Chairman and CEO Oakleigh Thorne.
   
• Under the terms of the agreement, Satcom Direct will receive $375M in cash and 5M shares of $GOGO stock ($7.17 per share as of 9/30 closing), and up to an additional $225M in payments tied to performance thresholds over the next four years.
   
• The transaction will be financed with a combination of cash-on-hand and $275M in committed new debt.
   
• $GOGO shares finished the week -15% lower and are down -35% YTD. 

In Other News

Chart of the Week

Links

Opinion

Earnings Calendar