Gilat to Acquire Stellar Blu, an IFC Market Leader

Petah Tikva, Israel, June 17, 2024 — Gilat Satellite Networks Ltd. (Nasdaq: GILT, TASE: GILT), announced today that it has signed a definitive agreement to acquire Stellar Blu Solutions LLC, which will become a core component of Gilat’s IFC growth strategy.

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Gilat expects its annual revenues from Stellar Blu to range between $100 Million to $150 Million beginning in 2025, based on Stellar Blu’s robust backlog

Highlights

  • The acquisition positions Gilat as a market leader in In-Flight Connectivity (IFC) technologies and solutions for Commercial and Business Aviation, with extensions to adjacent high-end mobility markets ideally suited to Electronically Steered Antenna (ESA) solutions.
  • Stellar Blu Solutions’ ESA terminal provides full LEO and GEO multi-orbit support, addressing the future strategy of key commercial IFC service providers.
  • Stellar Blu’s go-to-market partners align well with Gilat account strategies, potentially yielding new product and service opportunities.
  • Gilat will pay $98 Million at closing, and up to an additional $147 Million payable in cash subject to the achievement of post-closing business and financial objectives.
  • The acquisition is expected to be accretive on a non GAAP basis starting the second half of 2025.

Stellar Blu Solutions is a US-based leading avionics solution provider of next-generation SATCOM terminal solutions. The acquisition is a significant step in Gilat’s initiative to increase its presence in the growing IFC market. Gilat expects its annual revenues from the acquired business to range between US$ 100 Million to US$ 150 Million beginning in 2025, based on Stellar Blu’s existing backlog. The acquisition is expected to be accretive on a non GAAP basis starting the second half of 2025.

Gilat will pay an initial cash payment of US$ 98 Million at closing, subject to customary adjustments, and up to an additional US$ 147 Million payable in cash, subject to the achievement of post-closing financial and business goals. Gilat intends to finance the acquisition with its existing cash reserves and an external credit facility.

The transaction has been approved by Gilat’s Board of Directors and by Stellar Blu Solutions Board of Managers. The closing of the transaction is subject to certain regulatory approvals, including the receipt of clearance from the Committee on Foreign Investment in the United States (CFIUS) and the U.S. Federal Trade Commission (FTC) and the Department of Justice (DOJ) under the HSR Act, as well as other customary closing conditions. The acquisition is expected to close in the second half of 2024.

Stellar Blu Solutions specializes in the development of specialized connectivity, network, and electronics solutions for satellite networks. The Stellar Blu “Sidewinder” solution is novel in its open architecture, full ESA terminal optimized to enable the performance and cost advantages of multi-orbit strategies. The Sidewinder architecture is modular and easily extensible into other aerospace, and mobility applications. The Stellar Blu platform has been selected by Intelsat, Panasonic, OneWeb and others, to provide next-generation satcom solution offerings. Through this network of partners, the Stellar Blu solution has been embraced by some of the world’s largest airlines.

“Stellar Blu Solutions is a leading US-based avionics solution provider, delivering ESA satcom terminals to the world’s largest IFC service providers,” commented Adi Sfadia, Gilat’s CEO. “The acquisition is a major milestone in Gilat’s growth strategy to expand its business further into the IFC market. Moreover, we believe that with Gilat’s global reach, we can bring Stellar Blu’s innovative solutions to other high-end mobility markets in need of an ESA solution. Jointly, we will provide Stellar Blu customers with a comprehensive support network. We see strong synergies between the companies and are looking forward to working with Stellar Blu Solutions’ leadership in support of these world class customers.”

“We are proud of our Stellar Blu team for getting the company positioned to join Gilat and expect that unified with Gilat’s resources, leadership position in the SATCOM market and its vast international reach, Stellar Blu will be well placed to continue its growth and product breakthrough,” said Tracy Trent, CEO of Stellar Blu Solutions. “We believe Stellar Blu’s innovative open architecture products, and significant leadership within the IFC market will strongly enhance Gilat’s strategy in this sector.”

 

Advisors

William Blair LLC is serving as financial advisor to Gilat. Naschitz Brandes Amir & Co., Carter Ledyard & Milburn LLP and Crowell & Morning LLP are acting as Gilat’s legal counsel. Houlihan Lokey is serving as an exclusive financial advisor to Stellar Blu. Sheppard, Mullin, Richter & Hampton, LLP is acting as Stellar Blu’s legal counsel.