Inmarsat deal gives private equity partial win

LONDON, Nov 8 (Reuters Breakingviews) - Like its satellites, Inmarsat keeps going round and round in circles. The telecommunications firm, which started life in the 1970s as a system to locate shipping distress signals, is returning to public markets via a $7.4 billion cash-and-shares offer from U.S. rival Viasat (VSAT.O). The deal comes only two years after it left the London Stock Exchange’s orbit in a $6.1 billion buyout by Apax Partners, Warburg Pincus and two Canadian pension funds.

As a provider of inflight broadband to airlines, Inmarsat suffered a proper pandemic whack. This year’s adjusted EBITDA is estimated at $740 million, less than 2018’s $770 million. And the gradual recovery in air passenger traffic probably means more sedate growth forecasts than the ones Warburg and Apax were contemplating two years ago. Viasat at least reckons it can make savings worth $1.5 billion in today’s money. It’s paying a rich 10 times this year’s EBITDA, more than Inmarsat’s 2019 buyout multiple, despite the bleaker outlook. For the buyout barons, that’s partial relief. (By Ed Cropley)

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