Gogo's $375M acquisition and its public sector piece

Gogo, a provider of in-flight broadband connectivity for business aircraft, has agreed to acquire communications hardware maker Satcom Direct for approximately $375 million in cash to further push into a higher satellite communications orbit.

This transaction announced Monday also includes a sizeable public sector component that is worth noting. Satcom Direct expects to generate $485 million in revenue this year and estimates around 20% of its sales as being generated from government work.

Satcom Direct’s antenna and hardware product lines are designed to operate in geostationary orbit satellite networks, while Gogo’s solutions are made to work in low-Earth orbit.

In 2018, Satcom Direct booked a potential $245 million blanket purchase agreement from the Defense Information Systems Agency for global voice and data connectivity services to the U.S. military and other government agencies.

That potential five-year pact tasked Satcom Direct to supply a terrestrial network, data center and aeronautical support services to DISA for the transmission of information from aircraft to government facilities.

Satcom Direct has recorded approximately $9.2 million in unclassified prime contract revenue over the trailing 12 months with DISA representing 71.4% of that spend, according to USASpending.gov. The remainder is mostly represented by the Forest Service, Air Force and Drug Enforcement Administration.