Israel’s Gilat Satellite Networks (Nasdaq: GILTF) and communications giant SES Global announced on Thursday that French telecom equipment maker Alcatel had acquired 17.9% of Satlynx, a joint Gilat-SES venture.
Alcatel purchased the stake through its subsidiaries, Alcatel Space and SkyBridge LP. The agreement is important for Satlynx, as it opens the door for the venture, and for Gilat, to gain further deals with the French giant in the future.
Sources in the telecom industry estimate that under the deal, Alcatel will pay Satlynx approximately €30-50 million. Some of the payment will be in cash, while the rest will be through services that Alcatel will buy from the venture.
Yesterday, Gilat shares soared 26.3% on a huge volume to close at $4.80, reflecting a company value of $62.3 million.
Satlynx was established in May 2002, and offers two way satellite broadband access services to telecommunication operators and Internet service providers in Europe. Under the agreement, Alcatel will expand Satlynx's product line to include a digital video broadcasting system.
SES and Gilat have also executed an agreement to fund the development of a low cost, Ka-band version of Gilat's popular Skystar 360E family product line.
Satlynx chairman and Gilat Business Development senior vice president Joshua Levinberg said,” Satlynx is already uniquely positioned to supply a wide spectrum of satellite-based two-way, broadband services, as well as data networks, to corporations and small businesses throughout Europe. Alcatel's joining the company will further enhance Satlynx's position as a leader in its markets and should give a boost to our efforts in promoting the broadband-over-satellite concept."
Satlynx vice-chairman and SES Global corporate development executive vice president Robert Bednarek said, "We sincerely welcome Alcatel's strong endorsement of our European two-way satellite broadband initiative and we look forward to working closely with Alcatel and Gilat in the further evolution of satellite-based two-way services. The European market shows signs of significant demand over the coming years for satellite-based broadband and the strong partners in Satlynx enables the company to aggressively and confidently pursue these opportunities."
Published by Globes [online] - www.globes.co.il - on 19 June, 2003