Global Eagle Ups In-Flight Entertainment Stake With IFE Services Purchase
The fourth acquisition in two years by Harry Sloan and Jeff Sagansky’s investment vehicle gives it 70 percent of the airline film and TV market worldwide.
Two years after it was created by Harry Sloan and Jeff Sagansky, Global Eagle Entertainment has acquired IFE Services Limited for $36 million -- giving it a 70 percent market share worldwide as a provider of movies, TV shows and game content to airlines.
The latest in a series of acquisitions since 2011 was actually of Travel Entertainment Group Equity Limited, which is the U.K.-based parent company of IFE Services Limited. The seller in the all-cash deal was GCP Capital Partners LLP.
“This acquisition is in line with our strategic objective to grow our position as the leading provider of in-flight media, to broaden our client base and to further strengthen the combined service offerings we provide to airlines worldwide,” said John LaValle, CEO of Global Eagle. “The addition of IFE Services will significantly enhance our presence in multiple fast-growing, emerging markets where our combined service offerings are in demand.”
“We believe we can unlock substantial efficiencies from our combined operations to the benefit of our shareholders,” said Global Eagle CFO Dave Davis. “At the same time, we continue to be in a solid position to pursue additional acquisitions given our healthy balance sheet, strong management team and growing global footprint.”
Global Eagle started as a “blank check” investment fund, which means investors put up money to grow the company without knowing the specifics of what would be acquired.
Global Eagle has now acquired four companies' in-flight content and connectivity business (Row 44, AIA, Post Modern Group and now IFE Services).
The acquisition is expected to create synergies through more efficient operations and give Global Eagle a stronger presence in the developing markets of Africa, Asia and South America.
For all of this year, the company predicts IFE Services will add about $37 million to $40 million of annual revenue and approximately $7 million to $9 million of adjusted EBITDA.
To do the deal, Global Eagle sold another 2.4 million shares of common stock to an existing investor (unnamed) for $21 million. IT is also issuing a $19 million promissory note to another existing shareholder, PAR Investment Partners, convertible into non-voting stock.