Gogo Inc. Reports $375M Upfront Purchase Price

By Tamara Parker • Thursday, October 10 15:19 • Permanent Link

Gogo Inc. has released its financial results for the last twelve months ending in Q2 2024 and the pro forma capitalization sources. The company's upfront purchase price stands at $375 million, supported by a new term loan B due 2031 of $275 million and estimated fees of $22 million. The total sources amount to $397 million, 1.4 times the total uses. The company's LTM Q2 '24 PF Syn. Adj. EBITDA is reported at $281 million.

In the operating highlights, Gogo emphasizes its position as a leading provider of in-flight internet and connectivity services for the business aviation sector. The company's gross profit is primarily driven by the highly recurring services segment, which accounts for 81% of the LTM Q2’24 revenue. Additionally, the company divested its cash-burning Commercial Aviation business unit in December 2020 and is now focused on its highly recurring and profitable Business Aviation business unit.

Satcom Direct, on the other hand, is a leading provider of satellite-based connectivity and hardware solutions for the Business Aviation and Military / Government markets. The company serves approximately 6,350 aircraft in service, with 77% of its revenue coming from the Business Aviation segment.

In terms of financials, Gogo's 2023A revenue stood at $398 million, with a service revenue CAGR of 11%. The company reported an adjusted EBITDA of $174 million, representing a 44% margin. Satcom Direct experienced a revenue growth of 12.2% in 2023, reaching a total revenue of $398 million.

The press release also outlines Gogo's plans to launch and scale LEO in two attractive and underpenetrated markets, highlighting the positive trends driving adoption. The acquisition of Satcom Direct is expected to accelerate Gogo’s "Now and Next" strategy, serving all segments of the BA market.

The historical standalone financials show that Gogo’s total revenue grew by 20.4% in 2021, while Satcom Direct experienced a 16.5% revenue growth in 2023. Gogo's adjusted EBITDA margin stood at 40.8% in 2023, while Satcom Direct reported a margin of 17.8%.

The pro forma adjustments for Q2 '24 LTM EBITDA include 5G and Galileo, which contributed to a pro forma EBITDA of $281 million. Additionally, the reconciliation of GAAP to non-GAAP measure adjusted EBITDA shows that Gogo's Q2 2024 adjusted EBITDA amounted to $152 million.

Today the company's shares have moved -2.0% to a price of $6.38. For more information, read the company's full 8-K submission here.

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