Viasat Explores Sale of Part of Government Services Unit, could fetch as much as $1.8bn

Viasat, the geostationary satellite company, is considering a sale of part of its government services unit.

The company is working with an adviser to field interest for the part of division that provides encryption technology, which could fetch as much as $1.8bn, said the people, who asked not to be identified because they weren’t authorized to speak publicly.

The business, which is likely to attract interest from other defense companies and private equity firms, generates about $120m in annual earnings before interest, taxes, depreciation, and amortization, the people said. The unit provides products that help clients including the government encrypt communications.

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Viasat hasn’t made a final decision to pursue a sale and its plans could still change, the people said.

“Viasat does not comment on speculation or rumors related to potential company acquisition or sales transactions,” a representative for the Carlsbad, California-based company said in an emailed statement.

Viasat rose 2.3% to close at $28.68 in New York trading Tuesday, giving the company a market value of about $2.2bn.

The deliberations come as Viasat seeks to complete of its purchase of peer Inmarsat Group, creating a company with a fleet of 19 satellites, with 10 more under construction for launch in the next three years. That transaction was seen by the market as an attempt to counter rising competition from firms including Elon Musk’s Starlink and OneWeb, which is partly backed by the UK government.

The UK’s Competition and Markets Authority has opened an investigation into Viasat’s acquisition of Inmarsat.

Source: BNN Bloomberg

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