Gogo Business Aviation is buying Satcom Direct, a satellite communications hardware manufacturer and service provider, in a deal that took the business aviation industry by surprise when it was announced this morning. Under the agreement, Satcom Direct will receive $375 million in cash and five million shares of Gogo stock at closing, and up to an additional $225 million in payments tied to realizing certain performance thresholds over the next four years. The deal is expected to close by year-end.
The move boosts Gogo into a much higher satcom orbit, adding Satcom Direct’s Plane Simple antenna and hardware product lines for geostationary (GEO) satellite networks such as Viasat and Intelsat to Gogo’s soon-to-launch low-earth-orbit (LEO) Galileo system, which runs on Eutelsat’s OneWeb network. If anything, this acquisition will give Gogo a solid competitive edge and a full line of products, including its air-to-ground system in the U.S. and Canada, that will provide a counterbalance to business aircraft owners’ keen interest in SpaceX’s Starlink LEO satcom.
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