SatixFy SPAC deal valuation drastically cut

David Ripstein  credit: Tamat Matsafi
David Ripstein credit: Tamat Matsafi

The Israeli satellite technology company has lowered its current year revenue forecast by 75%.

Israeli satellite technology company SatixFy, which is in the process of a merger with a SPAC (special purpose acquisition company), will have to make do with a substantially lower valuation than it was given just six months ago. The company, which announced a merger in March at a post-money valuation of $813 million, will now be merged at a valuation less than half that, of just $365 million, the SPAC in question, Endurance Acquisition Corp. (Nasdaq: EDNC), reports. The final date for completion of the deal is November 7.

It appears that SatixFy, which in the past made an unsuccessful attempt at a flotation on the Tel Aviv Stock Exchange, preferred not to postpone its plans to become a publicly traded company in New York, even at the price of a much reduced valuation. The lower valuation can be explained by a deterioration in the company’s results. SatixFy has cut its forecasts for the coming years.

It turns out that the forecasts that SatixFy made six months ago are no longer relevant, following changes in the assumptions on which they were made. Among other things, these concerned the number of new contracts that the company will be able to sign, and an improvement in supply chain conditions. SatixFy also reports a rise in the price of the raw materials for producing its chips, and cites uncertainty in the inflation environment, making its previous profit forecasts obsolete.

As a result, the revenue forecast for this year has been cut by 75%, from $40 million to $10 million, which is lower than the $21.7 million revenue figure for 2021. SatixFy expects adjusted EBITDA in 2022 to be a negative $20 million, and negative cash flow of $21 million. The company explains that some $14 million of the cut to its revenue forecast is the result of delays in the production of chips by a third party, preventing it from supplying products to customers.

For 2023, instead of revenue of $88 million and positive EBITDA of $23 million, the updated forecast is for revenue of $36 million and negative EBITDA of $6 million. In 2024, the company now expects to switch to positive EBITDA of $15 million on revenue of $80 million. The previous forecast was $47 million EBITDA on $166 million revenue.

SatixFy was founded and managed by the late Yoel Gat, who was one of the founders of Gilat Satellite Networks (TASE: GILT; Nasdaq: GILT). The company is currently headed by David Ripstein.

Published by Globes, Israel business news - - on August 24, 2022.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2022.

David Ripstein  credit: Tamat Matsafi
David Ripstein credit: Tamat Matsafi
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