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Viasat to accelerate European broadband strategy ahead of ViaSat-3 satellite launch

(18 November 2020 - Viasat) Viasat today announced it will strengthen its European presence by purchasing the remaining 51% share of Euro Broadband Infrastructure (EBI), the wholesale broadband services business created as part of Viasat's former partnering arrangement with Eutelsat Communications.

EBI provides fixed and mobile broadband services on a wholesale basis in the European and Mediterranean markets. In the initial partnering arrangement, Eutelsat contributed its existing European broadband operations to the wholesale business, including ownership of the KA-SAT satellite and related ground infrastructure. Eutelsat initially owned 51% of EBI, and Viasat the remaining 49% interest. The 51% controlling interest in EBI was acquired for €140M subject to customary net working capital and net debt adjustments. The purchase price will be funded with available cash, resulting in a cash outlay of €50M, net of approximately €90M of EBI's cash on hand.

The wholesale business adds to Viasat's established retail broadband services business in Europe where Viasat is offering enhanced home internet service in select European countries, including Spain, Norway and Poland. The Company also maintains a strong mobility presence, providing high-speed, high-quality in-flight connectivity (IFC) to seven European airlines as well as international airlines that fly into Europe. These initiatives provide a foundation for growth in the retail and mobility services sectors ahead of the launch of the ViaSat-3 global constellation. The second ViaSat-3 class satellite in that constellation will cover Europe, Middle East and Africa (EMEA), and is targeted for launch in 2022.

"Today's transaction accelerates Viasat's European broadband objectives by strengthening our services footprint and facilitating further market penetration," said Keven Lippert, chief commercial officer, Viasat. "By gaining full control of KA-SAT, Viasat can further expand its growing mobility business as well as establish operations and market presence ahead of our ViaSat-3 service launch, including the introduction of new capabilities enabling high-speed, high-bandwidth 'ViaSat-3-like' home internet service plans in select European markets. This earlier market roll-out will enable Viasat to build awareness and market knowledge ahead of the European service launch of the ViaSat-3 satellite platform. Additionally, through 100% ownership of EBI, Viasat will be better equipped to execute its distribution strategy ahead of the ViaSat-3 services launch by onboarding new local partners."

Under the agreement, Eutelsat and its subsidiaries will continue to provide transitional services for a limited period of time to Viasat's EBI business, including the operation of the ground network for KA-SAT, while Viasat/EBI will provide service continuity to the KA-SAT subscriber base of Eutelsat's Bigblu Broadband Europe division.

Two years following closing, the €140M in consideration may be adjusted up or down by up to €20M depending on the performance of certain EBI financial metrics achieved over this period. The transaction is expected to be accretive to the Company's earnings and EBITDA performance, and deleveraging with respect to the Company's debt to trailing twelve months EBITDA ratios. Closing of this transaction is expected to occur in the first quarter of 2021, subject to customary conditions precedent.

About Viasat

Viasat is a global communications company that believes everyone and everything in the world can be connected. For more than 30 years, Viasat has helped shape how consumers, businesses, governments and militaries around the world communicate. Today, the Company is developing the ultimate global communications network to power high-quality, secure, affordable, fast connections to impact people's lives anywhere they are—on the ground, in the air or at sea.