Iridium Acquires Satelles
March 4, 2024 - Iridium Communications Inc. (NASDAQ: IRDM), today announced that it had entered into an agreement to acquire Satelles, a provider of highly secure satellite-based time and location services that complement and protect GPS and other GNSS-reliant systems.This acquisition continues Iridium’s philosophy of investing in differentiating technologies uniquely suited to its network that significantly outperform competing solutions according to the company.
The market for assured Positioning Navigation and Timing (PNT) services, estimated to reach is evolving to require integrated small-form-factor devices instead of the server rack-size solutions connected to outdoor GPS antennas that are available today. Time synchronization and location data play an important role in the global economy, particularly in the commercial sector for major industries supported by critical infrastructure, such as financial services, telecommunications, cyber security, and transportation. These industries and others rely on an estimated 10,000 data centers globally and their hundreds of millions of data processing and storage servers. Each of these servers requires time synchronization and can benefit from the in-server room efficiency and resilience delivered by Iridium STL.
“This market is growing; it’s a perfect application of our network, and this solution solves a problem for critical industries better than anything else,” said Iridium CEO, Matt Desch. “Acquiring Satelles makes perfect sense for Iridium and is consistent with what our strategy has always been, which is to take advantage of our unique network to do what others can’t or do it better than anyone else can. STL is the superior solution available today, and we have been following and investing in Satelles’s technology roadmap to allow us to create even more opportunity. We’re excited to formally bring the Satelles team “in-house,” to the Iridium family.”
The STL service utilizes the stronger broadcast paging channels of the Iridium< satellite constellation to deliver precise timing information, which provides truly global, secure time and location signals that are 1,000 times more powerful than GNSS constellations. The service is resilient to regional GNSS outages, works inside buildings and is being used today to secure digital infrastructure for financial markets, governments, and major corporations.
STL will become a new business line of Iridium, led by Satelles CEO, Dr. Michael O’Connor who will report to Iridium CEO, Matt Desch. “Bringing STL into the Iridium family is going to be a supercharger for this capability that will benefit our customers and our society. I look forward to a bright future together,” said O’Connor.
Iridium is assuming all rights to the Satelles patent portfolio and anticipates the Iridium STL line of business will generate over $100 million in service revenue per year, by 2030, and additional revenue from equipment and engineering.
A long-standing investor in Satelles, Iridium had an ownership stake of around 20 percent from three previous investments in the company. For the remaining approximately 80 percent, Iridium will pay about US$ 115 million, net of cash remaining in the company, which will be financed through a tack-on to its term loan. Iridium expects to complete the acquisition in the next few weeks.
