GHL ACQUISITION CORP. and Iridium Holdings LLC, a provider of voice and data mobile satellite services (MSSs), have jointly announced the signing of a definitive agreement under which the two companies plan to combine. The proceeds of the transaction will enable Iridium to be debt free and well positioned to develop its next-generation satellite constellation, "Iridium NEXT." GHL Acquisition is the special-purpose acquisition company sponsored by Greenhill & Co., Inc., which raised approximately $400 million of gross proceeds earlier this year. It is approximately 17.5 percent owned by Greenhill & Co.
The board of directors of GHL Acquisition and Iridium unanimously approved the transaction, as did Iridium's major shareholders. The board values Iridium at approximately $591 million enterprise value. Following completion of the transaction, the combined enterprise will be renamed "Iridium Communications, Inc." and will apply for listing on the NASDAQ. Existing owners of Iridium will maintain a significant stake in the combined company.
Iridium currently has more than 305,000 subscribers. It claims to be the only provider of truly global satellite voice and data communications solutions with complete coverage of the Earth including oceans, airways, and polar regions. Iridium has demonstrated an impressive history of growth since its re-launch in 2001, increasing subscribers and revenue at 32 percent and 31 percent annual rates, respectively, from 2002 through 2007. The company's growth continues at a rapid pace with revenue, operational EBITDA, and net income growing 31 percent, 55 percent, and 87 percent, respectively, in the first half of 2008 over the same period in 2007.
Robert H. Niehaus, senior vice president of GHL Acquisition, will become chairman of the combined company upon completion of the transaction. That completion is subject to Federal Communications Commission approval, expiration of the applicable Hart-Scott- Rodino waiting period, GHL Acquisition stockholder approval, and other customary closing conditions. It is expected to take place in the first part of 2009.
GHL Acquisition will launch a tender offer for its common shares, which will close concurrent with completion of the Iridium transaction. Shares will be acquired at a price per share of $10.50 up to an aggregate purchase price of $120 million. That aggregate price will be reduced by the amount of cash distributed to stockholders who vote against the transaction and elect for the conversion of their shares.
