Space: Satellite imagery firm DigitalGlobe buys GeoEye
The commercial satellite Earth imagery firms DigitalGlobe and GeoEye have finally agreed to merge. The merger, which was in effect an acquisition of GeoEye by Digitalglobal worth $453 million, gives GeoEye shareholders either 1,425 shares in common stock of the new combined firm, or 1,137 shares in combined with $4.10 in cash, or the full amount of $20.27 in cash – some 34% above the closing stock price of GeoEye shares on 20 July.
As a result of the transaction, DigitalGlobe shareholders will own circa 64% of the shares of the combined company with the remainder going to GeoEye shareholders. The company is to be called DigitalGlobe and will continue to be led by Jeffrey R. Tarr as President and Chief Executive Officer of DigitalGlobe and General Howell M. Estes III as Chairman of the Board.
“The combination of DigitalGlobe and GeoEye creates a global leader in earth imagery and geospatial analysis,” said Tarr.
“We are excited to be joining forces with DigitalGlobe as we believe this transaction represents the best path forward for our shareowners, our customers, and ultimately, the taxpayer,” said Matt O’Connell, Chief Executive Officer and President of GeoEye, who will continue in an advisory capacity in the new firm.
The agreement was the end result of a long running series of negotiations during which both firms had attempted to buy each other out. This happened, most recently in May when DigitalGlobe formally turned down an offer from rival GeoEye to buy the company for $17 per share in a combination of cash and stock. The deal done this time is similar to a previously proposed deal early in the year in which DigitalGlobe’s stockholders were to own 60% of the combined company with GeoEye stockholders holding 40%. This was rejected by GeoEye at the time. However, what changed is that now GeoEye is expected to do much worse out of the two firms in the cuts to the EnhancedView imagery programme as provided by the U.S. National Geospatial-Intelligence Agency (NGA).
Syndicated content: David Todd, Flight Global