Gilat to Acquire Stellar Blu Solutions to Boost In-Flight Connectivity Capabilities

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Insider Brief:

  • Gilat Satellite Networks Ltd. has signed a definitive agreement to acquire Stellar Blu Solutions LLC.
  • Gilat plans to pay an initial $98 million in cash for the acquisition, with an additional $147 million contingent on meeting certain financial and business milestones.
  • The acquisition is projected to significantly boost Gilat’s revenues, with expected annual earnings from Stellar Blu ranging between $100 million and $150 million by 2025.

Gilat Satellite Networks Ltd. announced it has signed a definitive agreement to acquire Stellar Blu Solutions LLC. This acquisition is critical to Gilat’s strategy to expand its presence in the growing In-Flight Connectivity (IFC) market.

Stellar Blu Solutions is based in the US and is known for its advanced avionics and satellite communication (SATCOM) terminal solutions. The company’s flagship product, the “Sidewinder” system, features an open architecture and electronically steered antenna (ESA) technology. This makes it versatile and suitable for a range of aerospace and mobility applications. Major companies like Intelsat, Panasonic, and OneWeb have already adopted the Stellar Blu platform, making it a preferred choice for some of the world’s largest airlines.

Expansion in the IFC Market

The acquisition positions Gilat as a leader in the expanding IFC market, which is crucial for commercial aviation. Modern airlines depend heavily on advanced satellite communication technologies to provide seamless connectivity for passengers and enhance operational efficiency. With this move, Gilat strengthens its foothold in an industry where reliable in-flight connectivity has become a competitive necessity.

Technological Advancements

Stellar Blu’s ESA technology is a key asset for Gilat, supporting multi-orbit satellite constellations, including Low Earth Orbit (LEO) and Geostationary Earth Orbit (GEO) satellites. This capability aligns with the strategic directions of many leading satellite communication service providers, Space Impulse Senior Analyst Anup Gholap noted.

Financial Growth

Gilat plans to pay an initial $98 million in cash for the acquisition, with an additional $147 million contingent on meeting certain financial and business milestones. The acquisition is projected to significantly boost Gilat’s revenues, with expected annual earnings from Stellar Blu ranging between $100 million and $150 million by 2025. This financial growth will enhance Gilat’s market presence and solidify its role as a leading provider of satellite communication solutions.

Gilat aims to complete the purchase with existing cash reserves and a credit facility. The acquisition, expected to close in the second half of 2024, is subject to regulatory approvals from bodies such as the Committee on Foreign Investment in the United States (CFIUS) and the U.S. Federal Trade Commission (FTC).

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