Newtec sold for €250m
March 28, 2019
By Chris Forrester
Belgium-based satellite communications specialist Newtec is being sold to ST Engineering for €250 million, with ST paying 14.6 times Newtec’s EBITDA and 2.7 times the company’s annual revenues.
ST Engineering (Singapore Technologies Engineering) is paying cash for the asset. ST told analysts that that satcom-based revenues are growing at some 8 per cent a year, and helped by the high growth expected from 5G and new mega-constellations of satellites.
“The surge of low Earth orbit constellations will increase bandwidth capacity and reduce operating cost, thereby creating new demand,” ST stated. “New use cases, especially to support Smart City applications such as IoT and connected cars, will drive demand for satcom services.”
ST Engineering has to date focussed on the Asia-Pacific market, and with Asia contributing 79 per cent of the company’s revenues. US revenues were 8 per cent and Europe 6 per cent.
Newtec is a key technology provider in the satellite broadcast segment with unique ultra-high throughput capabilities and a strong presence in the European satcom market. It has a proven range of cost-effective consumer satellite terminals, and industry-leading bandwidth efficiency technology. Recently, Newtec was among the first companies to successfully test over-the-air communication via LEO satellites. LEO satellites are expected to take off with the launch of more than 5,000 satellites in the coming years. The company is also well placed to leverage the advent of IP-based satellite broadcast which is critical for real-time content distribution.
Growth is also expected to come from the growing needs for IoT and M2M connectivity, where millions of devices and telematic sensor points are expected to be connected for surveillance, data gathering and big data analytics.