Los Angeles, California – Global Eagle Entertainment Inc. has announced that it has acquired Travel Entertainment Group Equity Limited, the UK-based parent company of IFE Services Limited (IFE Services) from GCP Capital Partners LLP for approximately $36 million in cash. The acquisition expands Global Eagle’s leadership in delivering content and software solutions to the international travel industry.
Global Eagle’s purchase of IFE Services follows closely on the Company’s acquisition of digital content leader Post Modern Group (PMG) in July 2013. With a 20-year history, IFE Services provides a broad range of content solutions, spanning movies, TV programmes, games, mobile apps, publications, safety videos and technical support to a worldwide client base of over 50 airline and cruise ship operators. IFE Services has a particularly strong customer presence among quickly-growing airlines in developing markets in Africa, Asia and South America.
“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, Chief Executive Officer of GlobalEagle. “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 look forward to working together with IFE’s CEO Andy McEwan and the talented team at IFE Services in bringing our innovative solutions to the worldwide travel industry.”
“This is another transaction that we expect to be highly complementary to our existing business,” said Dave Davis, Chief Financial Officer of Global Eagle. “In addition to adding IFE Service’s strong cash flows, we believe we can unlock substantial efficiencies from our combined operations to the benefit of our shareholders. 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.”
For the full year 2013 and on a stand-alone basis, IFE Services is expected to generate approximately $37 million to $40 million of annual revenue and approximately $7 million to $9 million of Adjusted EBITDA, said Global Eagle.
“Having supported the business and the management team of IFE over the last five years, we are delighted that, in Global Eagle, IFE Services has a supportive new owner that will be able to capitalise on its achievements to date,” said Adam Maidment, Managing Director of GCP Capital Partners LLP. “We would like to thank the CEO, Andy McEwan, and his team for their excellent work over the last few years and we wish them well in this next phase of the business’ development.”
In connection with the consummation of the IFE transaction, Global Eagle agreed to sell to one of its existing institutional stockholders, 2,435,472 shares of Global Eagle’s common stock for an aggregate purchase price of $21,000,000, in a registered direct offering by means of a prospectus supplement to Global Eagle’s effective shelf registration statement which Global Eagle will file with the Securities and Exchange Commission (“SEC”). In addition, Global Eagle will issue to PAR Investment Partners, L.P., an existing Global Eagle stockholder, a $19,000,000 promissory note which is convertible into shares of Global Eagle’s non-voting common stock. The terms of these sales of securities will be contained in a Current Report on Form 8-K to be filed by Global Eagle with the SEC.