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It represents approximately 35% of the Government Systems segment’s revenue
Carlsbad, California, October 32022 /PRNewswire/ – Viasat Inc. (NASDAQ: VSAT), a leader in satellite communications, today announced that it has entered into a definitive agreement to sell its Link 16 Tactical Data Link (TDL) business to L3Harris Technologies. 1.96 billion dollarsThe agreement is subject to customary transaction adjustments. The sale is expected to bring Viasat cash proceeds of approx 1.8 billion dollars Net after estimated taxes, fees and other expenses.
The Viasat Link 16 Tactical Data Link business is a division of Government Systems. Over the past 25 years the business has grown to become a leading supplier of Link 16 TDL products and solutions. The business’ sales include Multipurpose Data Distribution System (MIDS) platforms and associated next-generation Link 16 terminals and handheld radios, as well as the Link 16 to space business.
“This transaction transforms our balance sheet, reduces interest obligations, and creates continued growth opportunities for the Link 16 business, enhancing our strategic focus by providing our customers with a competitive, innovative and reliable source for their future needs. The transaction also recognizes the value created by our outstanding team. L3Harris has been a long-term Link 16 strategic partner and has a portfolio that will benefit greatly from these capabilities. Looking ahead, the ViaSat-3 constellation and the Inmarsat acquisition both create opportunities for more forward-looking government systems growth in space-based businesses. More R&D, capital and labor synergies,” he said. Mark DunkbergCEO and Chairman of the Board, Viasat.
“The acquisition of Viasat’s TDL product line expands our capabilities as a leading resilient network solutions provider,” he said. Christopher E. Kubasik, L3Harris CEO and Chairman. “Global national security requirements in this sector are rapidly increasing, and now we can enhance JADC2 and expand it by integrating multi-functional, multi-domain mission solutions with Link 16.”
Link’s 16 TDL business had approx. 400 million dollars Income and estimated 125 million dollars Adjusted EBITDA for the trailing 12 months. June 30, 2022the latter of which is expected to be borne approximately one year after closing by the allocated dividend and corporate expenses.
Viasat will use the proceeds from the sale of Link 16 TDL to reduce net profit and increase liquidity. Pro forma for Link 16 TDL sales, independent net profit up June 30, 2022 It will decrease from 4.2x to approximately 1.4x LTM Adjusted EBITDA. In addition, the proceeds from the sale are expected to reduce the combined net leverage of Viasat and Inmarsat following the closing of the Inmarsat acquisition. June 302023. Viasat expects the proceeds to fully support a path to positive free cash flow, including the proposed transaction of Emarsat, with lower leverage and lower cash interest.
After providing pro forma results for the sale of Link 16 TDL, Viasat’s Government Systems segment generates approx. 700 million dollars Annual income for the last 12 months June 30, 2022. Moving forward, this section will focus on three main areas: broadband and narrowband satcom services, networking and technology; Data authentication and cyber security; and an emerging portfolio of space-based services, including LEO-to-GEO relays and a variety of Earth observation and sensor systems, including alternative position, navigation and timing (PNT) and spatial situational awareness.
The Inmarsat transaction continues as expected. Both of these transactions better support Viasat’s transition to earning more revenue from models based on recurring services. Pro forma for the sale of Link 16 TDL and the acquisition of Inmarsat, Viasat expects repeat services revenue to grow to approximately 77% of total combined revenues.
The sale of Link 16 TDL is expected to close in the first half of 2023 and is subject to regulatory approval and customary closing conditions. Viasat has received approval from Inmarsat’s equity sponsors for the Link 16 TDL sale.
JP Morgan Securities LLC is serving as lead financial advisor and PJT Partners is serving as financial advisor to Viasat. Latham & Watkins LLP is serving as legal counsel to Viasat.
Forward-looking statements
This press release It contains forward-looking statements regarding future events and our future results that are subject to safe harbors created under the Securities Act of 1933 and the Securities Exchange Act of 1934. A proposal relating to the acquisition of our Link 16 tactical data business with L3Harris (referred to herein as the “Link 16 TDL Sale”) and the expected timing, costs and benefits, and timing or satisfaction of regulatory and other closing conditions, the pending acquisition of Inmarsat ( with the sale of Link 16 TDL, the “Transactions”) and expected operations, financial position, liquidity, performance, expectations after the closing of the Transactions or growth opportunities; the performance and expected benefits of our ViaSat-3 class satellites and any future satellites we build or acquire; the expected completion, capacity, serviceability, coverage, useful life and other aspects of our satellites and the timing, cost, economics and other related benefits; forecasts of revenues, earnings, expenses or other financial items in 2023 and beyond; expected growth and trends in our business or key markets; future economic conditions and performance; development of technology, products or services, customer acceptance and expected performance, anticipated growth opportunities in our business segments; Construction and launch of our ViaSat-3 constellation; Plans, objectives and strategies for future operations; and other characteristics of future events or conditions, are forward-looking statements. Readers are cautioned that these forward-looking statements are only predictions and are subject to risks, uncertainties and assumptions that are difficult to predict. Factors that could cause actual results to differ materially include: risks and uncertainties related to the transactions, including the failure to obtain, or delays in obtaining, necessary regulatory approvals or confirmations for either transaction, the risk that such approval could result in conditions that could adversely affect us or the expected benefits of the transaction; failure to meet any closing conditions for transactions on a timely basis or at all; the occurrence of any events, changes or other conditions that may cause the termination of the agreement specified for both transactions, the ability to realize the expected benefits of transactions; our ability to successfully integrate Inmarsat’s operations, technologies and personnel; Our ability to realize the expected benefits of the ViaSat-3 class satellites and any future satellites we develop or acquire. unexpected expenses related to our satellite projects; our ability to successfully implement a services-based business model; limitations in our business prior to launching services on the ViaSat-3 satellites; risks related to the construction, launch and operation of satellites, including any abnormal, operational failure or failure of satellite performance, the impact of the COVID-19 pandemic on our business, suppliers, consumers, customers and employees or the general economy; our ability to successfully develop, introduce and sell new technologies, products and services; US government audit; changes in the international business environment and economic conditions; delay in approving the US government budget and reducing government defense spending; our reliance on U.S. government contracts and a small number of contracts that account for a significant percentage of our revenues; Decreased demand for products and services due to continued restrictions on customer capital expenditures; changes in relationships or financial conditions with major customers or suppliers; our reliance on certain third parties to manufacture and supply our products; Increasing competition; Introducing new technologies and other factors affecting the communications and defense industries; adverse regulatory changes (including changes affecting spectrum availability or permitted uses) affecting our ability to sell or deploy our products and services; changes in the way others use spectrum; our inability to acquire additional spectrum, use spectrum for additional purposes and/or operate satellites in additional orbital positions; competing for uses of the same spectrum or orbit that we use or intend to use; the impact of recent changes in US tax laws; our level of indebtedness and ability to comply with applicable debt covenants; our involvement in litigation, including intellectual property claims and litigation to protect our proprietary technologies; and our dependence on certain key personnel. In addition, please see the risk factors available in our SEC filings at www.sec.gov, including our most recent annual report on Form 10-K and quarterly reports on Form 10-Q. Readers are cautioned not to place undue reliance on forward-looking statements that speak as of the date on which they are made. We undertake no obligation to revise or update any forward-looking statements for any reason.
This press release includes Viasat’s stand-alone financial information as well as pro forma information giving effect to the Link 16 TDL sale for the periods indicated and certain pro forma combined financial information, both of which combine pro forma results with Link 16 TDL sales and financial information for the periods indicated. The pro forma and pro forma consolidated financial data are prepared for illustrative purposes only and are not indicative of what the actual financial position or results of operations would have been if the applicable transaction(s) had been consummated on the first date of the period presented and do not include all pro forma adjustments required for pro forma presentation under US GAAP.
About Vyasat
Viasat It is a global communication company that believes that everyone and everything in the world can be connected. For over 35 years, Viasat It has helped shape how consumers, businesses, governments and militaries around the world communicate. Today, the company is deploying the ultimate global communications network on land, air or sea to provide high-quality, secure, affordable and fast communications to impact people’s lives. Learn more about ViasatVisit: www.viasat.comgo to Viasat’s corporate blogor follow the company on social media: Facebook, Instagram, LinkedIn, Twitter Or YouTube.
Copyright © 2022 Viasat, Inc. all rights reserved. Viasat, the Viasat logo and the Viasat signal are registered trademarks of Viasat Inc. All product or company names mentioned are for identification purposes only and may be trademarks of their respective owners.
Source: Viasat, Inc.
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