DigitalGlobe gets $1.2 billion commitment to fund GeoEye acquisition

By Sara Rosenberg

New York, July 23 - DigitalGlobe Inc. has received a $1.2 billion financing commitment from Morgan Stanley Senior Funding Inc. and the Bank of Tokyo-Mitsubishi UFJ Ltd. to help fund its acquisition of GeoEye Inc. and refinance existing debt, company officials said on a call on Monday.

The debt commitment includes plans for a $150 million undrawn revolver, officials said.

Currently, DigitalGlobe has a $100 million revolver, but the company is looking to refinance with a larger revolver to provide the combined company with more flexibility.

Pricing on the new bank debt is anticipated to be in the area of Libor plus 450 basis points to 500 bps, officials added.

Pro forma leverage will be just over 3 times.

Under the agreement, GeoEye shareowners will have the right to elect either 1.137 shares of DigitalGlobe common stock and $4.10 per share in cash, 100% of the payment in cash ($20.27) or 100% of the payment in stock (1.425 shares of DigitalGlobe common stock) per share.

The amount of cash and stock is subject to proration depending upon the elections of GeoEye shareholders, such that aggregate consideration mix reflects the ratio of 1.137 shares of DigitalGlobe common stock and $4.10 per share in cash.

The total transaction value is around $900 million.

Pro forma 2012 revenue base for the combined company is expected to be more than $600 million.

Closing is expected in the fourth quarter or the first quarter of 2013, subject to receipt of regulatory approvals and approval from GeoEye shareowners.

DigitalGlobe is a Longmont, Colo.-based provider of commercial high-resolution earth imagery products and services. GeoEye is a Herndon, Va.-based source of geospatial information and insight for decision makers and analysts.

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