Gilat completes acquisition of Stellar Blu Solutions

Gilat completes acquisition of Stellar Blu Solutions
by Erica Marchand
Paris, France (SPX) Jan 07, 2025

Gilat Satellite Networks Ltd. (Nasdaq: GILT, TASE: GILT) has finalized the acquisition of Stellar Blu Solutions LLC, a US-based innovator in next-generation SATCOM terminal technologies. This strategic move positions Gilat to strengthen its role in the expanding In-Flight Connectivity (IFC) market.

Based on Stellar Blu's strong backlog, Gilat projects annual revenues from the acquisition to range between $120 million and $150 million in 2025. Additionally, the company anticipates this transaction will enhance its non-GAAP results in 2025. By the latter half of the year, once Stellar Blu achieves its target manufacturing capacity, its EBITDA margin is expected to exceed 10%.

"This acquisition is a pivotal step in our strategy to expand Gilat's presence in the growing In-Flight Connectivity (IFC) market," said Adi Sfadia, Gilat's CEO. "We expect Stellar Blu's cutting-edge technologies, combined with Gilat's advanced IFC solutions to position us as a market leader for both commercial and business aviation, as well as adjacent high-end mobility markets that are ideal for Electronically Steered Antenna (ESA) applications."

Mr. Sfadia further explained, "With the increasing demand for free, seamless, high-quality in-flight Wi-Fi and Stellar Blu's pioneering expertise in multi-orbit LEO and GEO IFC solutions, this acquisition enhances Gilat's ability to meet the most demanding service level agreements in the industry, opening up new growth opportunities in aviation and beyond." He also noted, "We expect to ship hundreds of Stellar Blu's Sidewinder terminals during the upcoming quarters."

The acquisition's closing consideration was $98 million in cash, funded partly through a new $100 million secured credit line from HSBC Bank USA and Bank Hapoalim. Of this, $60 million was used at closing, while the remaining $40 million is earmarked for potential earn-out payments. The secured loan bears an interest rate of SOFR plus 2.6% to 3.35% and spans three years. Gilat's decision to use a mix of cash reserves and credit ensures flexibility to pursue further opportunities.

The agreement also includes provisions for additional consideration of up to $147 million in cash, contingent upon achieving specific operational and strategic milestones within two years of signing.