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DigitalGlobe plans bank debt structure to finance GeoEye acquisition
By Sara Rosenberg
New York, Aug. 15 - DigitalGlobe Inc. revealed in an 8-K filed with the Securities and Exchange Commission on Wednesday that it has chosen a bank debt structure to help fund its acquisition of GeoEye Inc. and refinance about $1 billion of existing debt.
The company expects pricing on the new bank debt to be in the area of Libor plus 450 basis points to Libor plus 500 bps.
In addition to the drawn funds, the company will have an undrawn $150 million revolver.
Post closing, debt to EBITDA will be around three times.
Previously, the company has said that it received a $1.2 billion financing commitment, including the revolver, from Morgan Stanley Senior Funding Inc. and the Bank of Tokyo-Mitsubishi UFJ Ltd. for the transaction.
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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