LONDON/NEW YORK (Reuters) - UK-based private equity firm BC Partners agreed on Tuesday to buy a majority stake in Intelsat Ltd., the world’s largest commercial satellite operator, for $4.6 billion cash.
The private equity group is buying a 76 percent stake in Intelsat, leaving the current private equity owners Apax Partners APAX.UL, Permira PERM.UL, Apollo Management and Madison Dearborn Partners, as well as management, with a 24 percent stake.
Intelsat has $11.4 billion of debt and the company will take on another $3.85 billion of debt at closing.
The deal is the largest in BC Partners’ history and its first acquisition of a company with U.S. headquarters. It recently opened a small office in New York.
“Its valuable cable and direct-to-home neighborhoods, strength in network applications, blue chip customer base and solid backlog of long-term contracts create an attractive investment opportunity,” said Raymond Svider, a managing partner at BC Partners, in a statement.
Intelsat Chief Executive Dave McGlade is expected to stay in the role.
BC Partners received $5.11 billion of financing commitments from Credit Suisse, Banc of America Securities and Morgan Stanley. Credit Suisse advised Intelsat and Merrill Lynch and Perella Weinberg advised BC Partners.
As part of the transaction, which the two sides expect to close in six to nine months, Bermuda-based Intelsat will retire about $860 million of existing debt and $400 million of 5.25 percent senior notes due 2008.
Intelsat was taken private in August 2004 by Apax, Permira, Apollo and Madison in a $3.1 billion deal. Months later, Intelsat expanded by agreeing to buy another large satellite operator, PanAmSat.
Private equity firms in particular are drawn to the satellite sector because of the companies’ steady cash flows, which allow them to take on large amounts of debt to finance transactions.
Intelsat has a fleet of 51 satellites 36,000 km above the earth which provide fixed satellite services to media, network services and government sectors, according to its Web site.