August 12, 2014 / 8:00 AM / in 3 years

UPDATE 1-HK satellite firm serving troops in Afghanistan stages strong Sydney debut

* Speedcast shares end at A$2.10, premium of 7 pct to issue price

* Speedcast raises A$150 million in Australia IPO

* Rise in global “events” means bigger work pipeline, CEO says (Recasts with Afghanistan and Ukraine work, CEO comments, shares close)

By Byron Kaye

SYDNEY, Aug 12 (Reuters) - A satellite internet provider serving U.S. and Australian troops in Afghanistan and air crash investigators in Ukraine made a strong debut in Sydney trading, with the firm saying increasing incidence of “man-made disasters” would bolster its prospects.

Hong Kong-based Speedcast International Ltd had raised A$150 million ($138.86 million) in its initial public offering selling 64 percent of its stock. The rest are held by directors and Boston-based private equity owner TA Associates.

The proceeds will be used to pay down debt and finance Speedcast’s ongoing acquisition streak - it has made five acquisitions in the past two years. The funds will also go into ensuring that it has capacity to take on a pipeline of possible new work that the company said it cannot forecast.

“When we look at what is happening in the world right now, in Iraq and Libya, in Syria, in Ukraine where we have some services being used in the investigation on the crash of MH17, there’s always the potential that such events will happen,” Chief Executive Officer Pierre-Jean Beylier told Reuters in a telephone interview.

“It will have a positive impact on our revenues, but it’s not something we’re forecasting,” said Beylier, who is a shareholder with a 5.9 percent stake now worth A$14.86 million.

Speedcast splits its work in conflict and crisis zones from its main earnings statements and forecasts because of the unpredictability of “event-driven business”, he said.

Excluding acquisition costs and IPO expenses, Speedcast’s prospectus said it has forecast a 68 percent rise in pro forma net profit to $6.085 million for the 2014 financial year. That is despite a halving in revenue from Afghanistan work following the withdrawal of most troops to a forecast $5.45 million.

Speedcast started as a small satellite internet provider in Hong Kong in 1999, owned by Asia Satellite Telecommunications (AsiaSat) and private investors. In 2012, after building up its technology offering, TA Associates and directors bought out the company.

Speedcast says it currently serves 1,000 customers in 3,000 hard-to-reach land sites, mainly in the Asia-Pacific region, and 1,700 offshore rigs.

In early 2005, it supplied satellite services to 1,000 clients in Indonesia’s Aceh province following the 2004 Boxing Day Indian Ocean earthquake and tsunami.

Shares in Speedcast closed at A$2.10 on Tuesday, a 7 percent premium to their A$1.96 issue price. The company’s market value stood at A$252.35 million.

Australia is headed for its biggest year of new listings in a quarter century with $7.9 billion raised from the start of 2014 to Aug. 5, according to Thomson Reuters data, more than three times the same period last year. (1 US dollar = 1.0793 Australian dollar) (Reporting by Byron Kaye; Editing by Edwina Gibbs and Ryan Woo)

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