RigNet completes acquisition of Inmarsat's energy broadband business

RigNet announced that it has completed a strategic transaction with Inmarsat, involving the sale of substantially all of Inmarsat's Energy Broadband business to RigNet. RigNet has acquired Inmarsat's Energy Broadband business for $25M in cash. The energy business includes assets, employees, contracts and working capital. Inmarsat's energy interests in Russia have been excluded from the transaction. The business being acquired had estimated revenues of $68M in 2012, and is expected to have an annual growth rate of 5% through 2014. The company expects the acquired business to contribute EBITDA of $5M, before synergies, for the period February 1, 2014 through December 31, 2014 and achieve an EBITDA contribution margin range of 8%-10% on a run-rate basis within the first year of closing. As RigNet integrates the operations, it anticipates that it will incur $2M-3M of integration expenses through 2014. Based upon past history, annual capital expenditures for success-based opportunities and maintenance have averaged $4M-5M for the acquired business. RigNet expects that it will make additional capital investments of $4M in 2014 to continue the network upgrade projects in the acquired business that are currently underway.