7th Jul 2016 07:43
LONDON (Alliance News) - Satellite Solutions Worldwide Group PLC on Thursday said it has agreed to acquire UK-based satellite broadband provider Avonline Satellite Services Holdings Ltd, backed by a new financing deal with the UK's Business Growth Fund.
Satellite Solutions, which provides rural and last-mile satellite broadband services, said it will pay an initial GBP10.0 million for Avonline, GBP9.5 million upfront and GBP500,000 a year after completion based on financial targets being met. A further, undisclosed payment will be made subject to the financial performance of Avonline.
The acquisition will more than double the size of Satellite Solutions' customer base in the UK and globally. Satellite Solutions added the revenue per Avonline Broadband user is comparable with Satellite Solutions' revenue per user in the UK, but Avonline's margins are around a third stronger.
The deal will be funded by a GBP12.0 million investment in Satellite Solutions by the Business Growth Fund, a vehicle backed by UK banks and provides funding for small and medium-sized businesses.
This will comprise a GBP9.6 million unsecured loan note and a further GBP2.4 million unsecured convertible loan note, convertible into Satellite Solutions shares at 9.0 pence apiece. Shares in Satellite Solutions were up 9.0% to 8.45p on Thursday morning following the announcement.
"Combining Avonline Broadband with our existing business gives us a tremendous position of strength within the burgeoning UK satellite broadband market. The acquisition generates a number of economies of scale and operational benefits which we already have plans to implement following completion," said Satellite Solutions Chief Executive Andrew Walwyn.
By Sam Unsted; [email protected]; @SamUAtAlliance
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