DigitalGlobe Acquired by MDA

According to a press release, on February 24^th, MacDonald, Dettwiler and Associates Ltd. (“MDA”) (TSX: MDA), a Canadian multinational communications and information company providing technology solutions to commercial and government organizations worldwide, and Colorado-based DigitalGlobe, Inc. (“DigitalGlobe”) (NYSE: DGI), a global leader in Earth imagery and geospatial content, announced they have entered into a definitive merger agreement, pursuant to which MDA will acquire DigitalGlobe for US$35.00 per share in a combination of cash and stock.

Nishinoshima Volcanic Island Growth. Image Courtesy of DigitalGlobe

DigitalGlobe is valued at an equity value of approximately C$3.1 billion (US$2.4 billion), and an enterprise value of C$4.7 billion (US$3.6 billion), including assumption of DigitalGlobe’s C$1.6 billion (US$1.2 billion) in net debt. Both companies’ boards of directors have unanimously approved the acquisition, and the agreement is expected to close in the second half of 2017.

Under the terms of the agreement, each DigitalGlobe common share will be exchanged for US$17.50 in cash and 0.3132 MDA common shares, representing a per share value of US$17.50 based on MDA’s unaffected closing share price of C$73.40 on the Toronto Stock Exchange (TSX) on February 16, 2017, the day prior to market speculation about a potential combination, and a C$/US$ exchange ratio of 0.7612. The total cash and stock per share value consideration represents an 18% premium based on DigitalGlobe’s unaffected closing stock price on the New York Stock Exchange (NYSE) on February 16, 2017.

The acquisition is expected to merge the two companies’ space-related capabilities, with unique positioning to capture growth in the U.S., Canadian and global Earth observation and geospatial services markets.

Will the offices of DigitalGlobe remain where they are and employ the same staff?

DigitalGlobe is expected to operate as a standalone division of MDA, retaining its brand, name and headquarters in Westminster, Colorado. The combined company will have approximately 4,600 employees in the United States and will continue to employ more than 1,800 in Canada.

What are some of the goals for MDA going forward?

We are creating a new company that will lead the industry, offering space systems and imaging solutions from inception to execution, able to make design decisions with the customer’s needs in mind.

This combination has the scale, resources and technology to serve the large and increasingly complex needs of government and commercial customers globally. By combining MDA and DigitalGlobe, we are significantly expanding our total addressable market by broadening both companies’ capabilities and facilitating future growth.

Will the name DigitalGlobe be retained after the acquisition?

Yes. DigitalGlobe is expected to retain both its brand and name.

In what capacity will the acquisition further DigitalGlobe’s goals and outreach?

The combination will bring together complementary space-related capabilities, creating a stronger company uniquely positioned to capture growth in the U.S., Canadian and global Earth observation and geospatial services markets given its ability to provide complete, end-to-end space systems, earth imagery and geospatial solutions. Together, the combination will leverage a full suite of space-related capabilities, including communications and Earth observation satellites and robotics, ground stations, integrated digital and radar imagery and data analytics, to commercial and government customers worldwide.

What segments of DigitalGlobe have enjoyed the greatest growth in 2016?

In 2016, each of DigitalGlobe’s customer groups, which include U.S. government, international defense intelligence and commercial customers contributed to topline growth. DigitalGlobe plans to drive continued growth in 2017 by using its cutting-edge technology, talented team and unique access to the world’s best satellite imagery and commercial geospatial analytics platforms to win new contracts and deliver more value to customers.

What percentage of DigitalGlobe services the defense industry and the commercial industry? Do you think that will change after the acquistion?

The combination creates immediate scale for both companies, giving the combined company the ability to serve larger and more complex customer needs of the U.S. and Canadian Governments, International Government and Commercial markets. The addition of DigitalGlobe to the existing SSL MDA businesses creates a company with a full suite of space technology and service capabilities, including the ability to drive innovation and customer value in satellites, imagery, analytics, communications and robotics. We believe that this diversification, combined with our increased scale and greater capabilities will unlock significant new revenue opportunities across the entirety of our customer base.

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Categories: 3D Cities, analytics, Big Data, climate change, cloud, cloud network analytics, data, DigitalGlobe, disaster relief, drones, emergency response, geospatial, GIS, government, image-delivery software, lidar, mapping, National Geospatial Intelligence Agency, photogrammetry, public safety, remote sensing, satellite imagery, sensors

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