Australian telecom buys Hauppauge-based Globecomm Systems Inc.
Globecomm Systems Inc., a Hauppauge-based provider of remote communications systems, is being acquired by an Australian telecommunications company. Credit: /
An Australian satellite communications company has agreed to acquire Globecomm Systems Inc., a Hauppauge-based provider of remote communications systems, for $135 million.
The deal by Sydney-based Speedcast International Limited marks the third sale of Globecomm since December 2013, when the publicly traded company was taken private by Manhattan-based Wasserstein & Co. for $340 million.
Globecomm, with about 350 employees worldwide, will adopt the Speedcast name after the expected close of the deal in the fourth quarter of 2018, a spokeswoman for the Australian communications provider said Thursday.
In announcing the acquisition late Monday, Speedcast said it expects to save more than $15 million in operating costs within 18 months through consolidating locations and other methods.
"The acquisition of Globecomm is fully in line with our strategy to consolidate our market and thus build competitive advantages based on scale and capabilities," Pierre-Jean Beylier, chief executive of Speedcast, said in a statement.
Shares of Speedcast fell 37 percent to close Tuesday at 4.20 Australian dollars on the Australian Securities Exchange after the Globecomm announcement. At the same time, the company issued a financial report for the six months ended June 30 that saw revenue increase 24 percent to $304.9 million. Shares closed Thursday at 4.21 Australian dollars.
Speedcast is purchasing Globecomm from HPS Investment Partners LLC, based in Manhattan, and Tennenbaum Capital Partners LLC, based in Santa Monica, California.
HPS and Tennenbaum provided financing to Wasserstein when it acquired Globecomm and those companies later took control of the company.
Globecomm's 130,000-square-foot headquarters sits at a 7.5-acre teleport dotted with satellite dishes. The company provides communications services for ships at sea, operates mobile telecommunications systems for U.S. government agencies, and supplies broadcast infrastructure for premium cable service Showtime Networks Inc., a subsidiary of CBS Corp.
Speedcast, with annual revenue of about $600 million--roughly triple that of Globecomm--said the acquisition will include the sale and lease-back of the Hauppauge facility.
The Speedcast spokeswoman said the company, with 1,400 employees in 40 countries, has been an active acquirer in the consolidating satellite communications industry, which has seen the price of bandwidth decrease.
"The dynamics of the business model are changing," she said.
Ken Schachter covers corporate news, including technology and aerospace, and other business topics for Newsday. He has also worked at The Miami Herald and The Jerusalem Post.
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