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Friday, 10/02/2009 7:57:53 AM

Friday, October 02, 2009 7:57:53 AM

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ViaSat plans to acquire WildBlue Communications for USD568m

Oct 02, 2009 (M2 EQUITYBITES via COMTEX) -- Provider of satellite and digital communication products ViaSat Inc (Nasdaq: VSAT) has signed a definitive agreement to acquire WildBlue Communications Inc, a Ka-band satellite broadband service provider, in a cash and stock transaction valued at USD568m.
The purchase price is approximately USD500m taking into account WildBlue's expected amount of cash on hand today.

WildBlue generated revenues of approximately USD209m, adjusted EBITDA of USD76m and USD52m of unlevered free cash flow for the trailing twelve month period ended 30 June 2009.

The consideration to be delivered at closing of the transaction to the WildBlue shareholders and creditors will consist of USD443m cash and USD125m million of newly issued ViaSat common stock.

ViaSat said that the free cash flow generated by WildBlue is expected to meaningfully exceed the transaction financing costs and, as a result, WildBlue cash flow is expected to become a source of funds to complete ViaSat-1 and accelerate network build-out.

The company will retain WildBlue cash on hand at closing, the amount of which is expected to change modestly between now and closing as a result of anticipated free cash flow in WildBlue's business and certain customary closing adjustments.

Also, ViaSat's assessment of the fair value of the net assets acquired as of the estimated transaction close date is expected to approximate the purchase price, resulting in no additional goodwill on the ViaSat balance sheet.

ViaSat intends to finance the cash portion of the transaction from a combination of WildBlue and ViaSat available cash on hand, and by working with certain of its lenders and others to structure financing which is expected to be implemented prior to close. A ViaSat has arranged with WildBlue current creditors a USD350m second lien term loan with a four year maturity, following closing. This loan can be used, at ViaSat's sole election, in whole or in part, in the event third-party debt financing is not raised on satisfactory terms prior to closing.

The number of ViaSat common shares to be issued at closing will be determined based on the ten-day volume weighted average closing price (VWAP) of ViaSat shares shortly prior to closing, subject to a collar mechanism. Accordingly, ViaSat will issue at closing not over approximately 5.685 million shares or not less than approximately 4.262 million shares. In the event the VWAP is equal to USD25.73, ViaSat will issue approximately 4.858 million shares.

ViaSat has the right to substitute additional cash for some or all of the ViaSat common shares to be issued at closing.

This capital-efficient transaction is expected to be accretive to ViaSat's Non-GAAP EPS immediately after closing.

In addition to accelerating the growth of WildBlue's consumer satellite broadband business, the transaction is also expected to promote organic growth opportunities for other ViaSat commercial and defence businesses.

The transaction, which is not subject to a vote of ViaSat's shareholders, is expected to close in the fourth quarter of ViaSat's 2010 fiscal year, ending 2 April 2010.

Credit Suisse Securities (USA) LLC and Latham & Watkins LLP acted as lead financial and legal advisor, respectively, to ViaSat. Morgan Stanley and Skadden, Arps, Slate, Meagher & Flom acted as financial and legal advisor, respectively, to WildBlue.

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