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Global Eagle buys IFE parent for $36 million

LOS ANGELES (AP) -- In-flight entertainment services company Global Eagle Entertainment Inc. said Monday that it had acquired Travel Entertainment Group Equity Ltd. for about $36 million in cash.

Travel Entertainment is the parent of IFE Services Ltd., which provides entertainment services to airlines and cruise lines.

IFE has a presence in airlines in developing markets in Africa, Asia and South America, Global Eagle said.

The sale by GCP Capital Partners LLP and other individuals closed Friday.

The companies expect to achieve cost savings by merging some operations in the first half of next year.

Global Eagle is financing the transaction in part by selling existing shareholder Putnam Equity Spectrum Fund about 2.4 million newly issued shares at about $8.56 each for a purchase price of $21 million. The share issuance increases the existing share count by about 4 percent.

It also borrowed $19 million from existing shareholder Par Investment Partners LP by issuing Par a note that is convertible into non-voting common stock and carries a 12 percent annual interest rate.

Global Eagle shares closed down a penny at $9.93 on Monday after the deal was announced.