Gogo Sells Commercial Aviation Business to Intelsat
Inflight WiFi provider says the move allows accelerated growth in the profitable business aviation segment
One of the primary suppliers of inflight WiFi, Gogo, Inc., has announced that it plans to sell its Commercial Aviation business to Intelsat. Intelsat, which filed for bankruptcy in May, says it will finance the $400 million transaction using cash on hand and borrowing from its $1 billion credit facility.
Intelsat says it has obtained support from key economic stakeholders, as well as approval from the US Bankruptcy Court for the Eastern District of Virginia, Richmond Division, to complete the acquisition.
“Following a competitive strategic review process, we’re confident this transaction unlocks the full value of the CA business for shareholders,” said Oakleigh Thorne, Gogo’s president and CEO.
The combination of Gogo’s commercial aviation division with Intelsat, the world’s largest global satellite operator, will create the leading vertically-integrated inflight connectivity provider, Thorne said, “with the additional resources and scale to support continued growth and innovation as demand for commercial air travel recovers.”
Gogo provides inflight internet products and services to major airlines such as Delta and American. In recent years, both carriers have moved to diversify their IFC providers, as each airline explored both improved satellite coverage and more flexible pricing options.
However Gogo’s business aviation products are also aboard thousands of private aircraft, including those of the largest fractional ownership operators. Gogo is headquartered in Chicago, with additional facilities in Broomfield, CO, and locations across the globe.
The Gogo board of directors has approved the transaction, which is expected to close before the end of the first quarter 2021, although the deal remains subject to customary closing conditions and certain regulatory approvals.