RigNet Inc. (NasdaqGS: RNET) announced Feb. 3 that it completed a strategic acquisition with London's Inmarsat Plc, a provider of global mobile satellite services, for $25 million in cash.
RigNet, of Houston, is a global provider of managed remote communications solutions to the oil and gas industry. It acquired substantially all of Inmarsat's energy broadband business as part of the transaction. It was also appointed as a value added reseller of Inmarsat's global xpress (GX) service and as a distribution partner for Inmarsat's L-band services to the energy sector worldwide.
Inmarsat's energy broadband assets include: microwave and WiMAX networks in the U.S. Gulf of Mexico and the North Sea serving drillers, producers and energy vessel owners; VSAT interests in the U.K., U.S. and Canada; an M2M SCADA VSAT network in the continental U.S. serving the pipeline industry; a telecommunications systems integration business operating worldwide; and a global L-band MSS retail energy business.
The energy business includes assets, employees, contracts and working capital. Inmarsat's energy interests in Russia have been excluded from the transaction.
The business being acquired had estimated revenues of $68 million in 2012, and is expected to have an annual growth rate of 5% through 2014. The EBITDA of the acquired business is expected to contribute $5 million from Feb. 1 through Dec. 31, 2014.
RigNet expects that it will make additional capital investments of $4 million in 2014 to continue the network upgrade projects in the acquired business that are currently underway. RigNet financed the transaction through its existing credit facility.
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