Business aviation broadband connectivity services provider Gogo announced it will acquire Satcom Direct for $375m cash, 5m shares of Gogo stock along with $225m in payments tied to performance thresholds over next four years.

“This transaction accelerates our growth strategies of expanding our total addressable market to include the 14,000 business aircraft outside North America, and delivering solutions that meet the needs of every segment of the BA market,” said Oakleigh Thorne, Gogo Chairman and CEO. “Together, Gogo and Satcom Direct will offer integrated GEO-LEO satellite solutions that provide the highest performance of any satellite solution, along with the world-class customer support that the global heavy jet segment demands.”

Gogo said it plans to finance the transaction with a combination of cash-on-hand and $275m in committed new debt, putting its net leverage at 4x post-closing. The company anticipates returning to its target net leverage range of 2.5-3.5x two years post-closing.

Gogo board of directors have unanimously approved the transaction and is subject to regulatory approvals and customary closing conditions and is expected to close by the end of 2024. 

“Satcom Direct is thrilled to be joining forces with Gogo, a company that shares our focus on delivering outstanding service and leading innovation,” said Chris Moore, president, Satcom Direct. “Our businesses have highly complementary core competencies, and our combined financial strength and expertise unlocks opportunities to invest in new technology and deliver significant long-term value creation.”

Kirkland & Ellis LLP and Hogan Lovells LLP are serving as legal advisors to Gogo. BofA Securities and Morgan Stanley & Co. LLC are serving as financial advisors to Gogo. Morgan Stanley Senior Funding, Inc., BofA Securities and Deutsche Bank Securities Inc. provided financing commitments to support the acquisition. Haynes Boone, LLP is serving as legal advisor, and J.P. Morgan is serving as financial advisor to Satcom Direct.