Gogo gets a new CEOGogo gets a new CEO

Gogo Inc. (NASDAQ: GOGO) ("Gogo" or the "Company") today announced the completion of its acquisition of Satcom Direct ("SD"), creating the only multi-orbit, multi-band, in-flight connectivity provider serving the needs of every segment of the global business aviation ("BA") and military/government mobility markets.

Gogo paid $375 million in cash and issued five million shares of Gogo stock to SD ownership at close and could pay up to an additional $225 million tied to realizing performance thresholds over the next four years. The transaction, including fees, was funded with $250 million of debt and $150 million of cash from the Gogo balance sheet.

The interest rate on Gogo's incremental debt is SOFR plus 6%, and the Company's annual interest expense will increase by an estimated $25 million to $27 million. Gogo's net leverage ratio at yearend 2024 is estimated to increase to 3.6x, and the Company expects to be back inside its target leverage range of 2.5x-3.5x within one to two years.

The transaction is immediately accretive, with $18 million of annual recurring cost savings achieved immediately after closing, and a total expected $25 million to $30 million in annual run-rate cost synergies to be achieved in the two years after close.

The acquisition is expected to accelerate sales of Gogo's soon-to-launch Galileo Low Earth Satellite ("LEO") connectivity product, by:

Read the full press release here.

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