MacDonald, Dettwiler plans new debt for DigitalGlobe purchase

By Sara Rosenberg

New York, Feb. 24 – MacDonald, Dettwiler and Associates Ltd. (MDA) has received a commitment for debt financing to help fund its acquisition of DigitalGlobe Inc., according to an 8-K filed with the Securities and Exchange Commission on Friday.

RBC Capital Markets and Bank of America Merrill Lynch are the lead banks on the deal.

Under the agreement, DigitalGlobe is being bought for $35.00 per share in a combination of cash and stock. Each DigitalGlobe common share will be exchanged for $17.50 in cash and 0.3132 of an MDA common share.

The transaction values DigitalGlobe at an equity value of about $2.4 billion and an enterprise value of $3.6 billion, including assumption of DigitalGlobe’s $1.2 billion in net debt.

Closing is expected in the second half of the year, subject to customary conditions, including required regulatory approvals, as well as approval by both MDA and DigitalGlobe shareholders.

Pro forma leverage will be around 4.1 times net debt to operating EBITDA at closing, but the company expects net leverage to be under 3 times by 2020.

MDA is a communications and information company. DigitalGlobe is a Westminster, Colo.-based provider of Earth imaging and geospatial solutions.

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