DigitalGlobe to launch $700 million credit facility on Tuesday

By Sara Rosenberg

New York, Jan. 14 - DigitalGlobe Inc. is scheduled to hold a bank meeting on Tuesday morning to launch a proposed $700 million senior secured credit facility, according to a market source.

Morgan Stanley Senior Funding Inc., Bank of Tokyo-Mitsubishi UFJ Ltd., J.P. Morgan Securities LLC and Citigroup Global Markets Inc. are the lead arrangers on the deal.

The facility consists of a $150 million five-year revolver that is expected to be undrawn at closing and a $550 million seven-year term loan B, the source said.

Proceeds will be used to help fund the acquisition of GeoEye Inc. and refinance about $1 billion of existing debt.

Other funds for the transaction will come from $500 million of senior notes, the source added.

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.

Closing is expected by Jan. 31, subject to regulatory approval from the Federal Communications Commission and the National Oceanic and Atmospheric Administration.

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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