Gilat Satellite Networks – a global leader in satellite networking technology, solutions, and services – announced that it has closed the acquisition of Stellar Blu Solutions, a leading US-based provider of next-generation SATCOM terminal solutions.
Based on Stellar Blu’s solid backlog, Gilat expects its annual revenues from Stellar Blu to range between $120 million and $150 million in 2025. And the acquisition is expected to be accretive on non-GAAP results for 2025. Furthermore, the Company estimates that once Stellar Blu reaches its target manufacturing capacity, which Gilat expects will occur during the second half of 2025, Stellar Blu’s EBITDA margin is expected to be above 10%.
The acquisition’s consideration at closing was $98 million in cash as adjusted. Even though the company had over $115 million in Net Cash at the end of 2024, the company used a new secured credit line of $100 million from HSBC Bank USA and Bank Hapoalim to fund $60 million of the consideration paid at closing. And the remaining $40 million, from the secured credit line, along with the Company’s resources, is expected to be called upon and cover potential earn-out payments. The three year loan will bear interest at a rate of SOFR plus 2.6% to 3.35%.
Funding this acquisition through a combination of the company’s resources and a secured credit line will provide Gilat with additional flexibility given the opportunities in the market.
The consideration payment is in connection with the acquisition may increase by up to an additional $147 million in cash, conditioned upon the acquired business achieving operational and strategic business milestones, during the first two years that follow the signing of the agreement.
KEY QUOTES:
“This acquisition is a pivotal step in our strategy to expand Gilat’s presence in the growing In-Flight Connectivity (IFC) market. We expect Stellar Blu’s cutting-edge technologies, combined with Gilat’s advanced IFC solutions to position us as a market leader for both commercial and business aviation, as well as adjacent high-end mobility markets that are ideal for Electronically Steered Antenna (ESA) applications.”
“With the increasing demand for free, seamless, high-quality in-flight Wi-Fi and Stellar Blu’s pioneering expertise in multi-orbit LEO and GEO IFC solutions, this acquisition enhances Gilat’s ability to meet the most demanding service level agreements in the industry, opening up new growth opportunities in aviation and beyond.”
“We expect to ship hundreds of Stellar Blu’s Sidewinder terminals during the upcoming quarters.”
– Adi Sfadia, Gilat’s CEO
