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Gogo Chairman and CEO Oakleigh Thorne (l) and Satcom Direct President Chris Moore sign purchase agreement.
Gogo and Satcom Direct (SD) have entered into a definitive agreement that would see Gogo acquire SD in a major consolidation of inflight connectivity providers to business aviation, the companies announced Sept. 30.
Under the agreement, SD would receive $375 million in cash and five million shares of Gogo stock at closing, plus up to $225 million in payments tied to achieving certain performance goals over the next four years. The transaction, which is subject to regulatory approvals, is expected to close this year.
The consolidation of the companies would establish a broadband satellite and 5G communications product line combining low earth orbit (LEO), geostationary orbit (GEO) and air-to-ground (ATG) connectivity options for business aviation and government/military aircraft. It sets up Gogo to grow its satcom business and challenge SpaceX, which has disrupted the legacy inflight connectivity market for business aviation and airlines with its LEO-based, Ku-band Starlink service.
Gogo is advancing a new Ku-band satellite offering called Galileo that will connect with the Eutelsat OneWeb constellation of LEO satellites. The Broomfield, Colorado-based company already is the leading provider of ATG communications to business aviation.
Following a chip design error that delayed its introduction, Gogo plans to launch a new 5G cellular service in the U.S. this year. Its major rival for ATG communications—SmartSky Networks—announced in August that it had ceased operations after failing to obtain financing.
Melbourne, Florida-based SD is an inflight connectivity service provider and reseller that has partnered with satellite network operators Eutelsat, Intelsat, Iridium, and Viasat to offer Ku-band and Ka-band broadband and L-band narrowband services.
The company builds its own modem units and routers—it is an exclusive provider of cabin connectivity hardware to Gulfstream—and has developed two tail-mounted, mechanically steered “Plane Simple” antenna systems to connect with the Intelsat FlexExec Ku-band and Viasat Jet ConneX Ka-band services, both based on GEO satellite networks.
With expected revenue of $485 million this year, SD generates about 80% of its revenue from the business aviation market and 20% from the military/government mobility market, Gogo said. The combined companies would have 2024 revenue of $890 million.
“Together, Gogo and Satcom Direct will offer integrated GEO-LEO satellite solutions that provide the highest performance of any satellite solution, along with the world-class customer support that the global heavy jet segment demands,” said Gogo Chairman and CEO Oakleigh Thorne. “This transaction also uniquely positions us to sell our Galileo LEO solution integrated into Satcom Direct’s GEO and L-band offerings as part of a multi-band, multi-orbit solution for the fast-growing military/government mobility market.”
SD recently hosted a press tour of its manufacturing facility in the Ottawa suburb of Kenata, Canada, during which executives said that first-year shipments of the Plane Simple Ku-band antenna and modem for midsize-to-heavy business jets have exceeded expectations. In May, the FAA awarded a first supplemental type certificate to install the Ka-band version of the satellite terminal on the Gulfstream G650. Plans call for the Ka-band version to enter service this year.
During the press tour, SD executives also provided an update on the co-development with Israel’s Gilat Satellite Networks of a fuselage-mounted, electronically steered antenna (ESA) that would connect with the Eutelsat OneWeb LEO constellation. The proposed combination with Gogo leaves unclear whether that system would be retained with Gogo’s Galileo ESA antenna, which is being manufactured by Hughes Network Systems.
Speaking Sept. 30 with analysts, Thorne said Gogo’s Avance platform and SD’s router hardware are “multi-bearer” systems that can connect to multiple satellite as well as ATG networks. In contrast, Starlink’s router is a “single-bearer” model, optimized for its own LEO network.
“What they’re trying to do is take consumer equipment that they build for millions of homes and then repurpose it for aviation needs,” he said. “The idea they have is that that’s going to be very efficient and they can do that very cheaply. If they start creating multi-bearer routers that’s not going to be cheap or easy and it’s not going to be consistent with the strategy of repurposing consumer-grade equipment for other verticals.”
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