Advanced Television

Global Eagle buys EMC for $550m

May 10, 2016

By Chris Forrester

In-flight entertainment supplier Global Eagle Entertainment (GEE) is buying teleport and satellite communications business EMC in a $550 million deal announced May 9th.

The deal, which is expected to close during Q3, is the latest move for GEE which has mopped up nine other businesses over the past year or two, including IFE entertainment specialists Row44 and Advanced Inflight Alliance.  This acquisition boosts GEE’s presence in the maritime cruise ship market.

“One of the big drivers for this transaction is the large expansion of the available market for Global Eagle,” said CEO Dave Davis. “The available market is over 150,000 cruise cabins, which we deliver some content into today, but there is an opportunity for significant expansion in the amount of content that we sell. Over 7,500 yachts and over 130,000 merchant vessels we all consider to be candidates for our connectivity and media products.”

“From a satellite bandwidth perspective, we have overlapping areas of coverage which aren’t needed,” he explained. “We have different contracts that we believe we can combine and save significantly on the combined company’s spend on satellite bandwidth. We also can take advantage of the EMC teleport infrastructure around the world and use it as it is today to drive our aviation network through. Then we have overlapping network operation centers and groups that we will look to optimize as well.”

EMC says it has 21 teleports located around the world, 52 global support centres, and more than 20 proprietary compression and bandwidth optimisation technologies. Davis added that GEE intends to leverage these assets to serve aviation customers as well as EMC’s core customer base. About 75 per cent of EMC’s revenue is maritime-based, whereas Global Eagle has been until now principally focused on commercial aviation.

Categories: Articles, M&A