Creates leading global communications and information company
Investor conference call and webcast at 5:30 a.m. PDT/8:30 a.m. EDT on
June 27, 2012
RICHMOND, BC, June 26, 2012 /CNW/ - MacDonald, Dettwiler and Associates
Ltd. (TSX: MDA), a provider of essential information solutions, today announced that
it has signed an agreement to acquire 100% of Space Systems/Loral, Inc.
(SS/L) for US$875 million in a transaction that is immediately
accretive. Headquartered in Palo Alto, California, SS/L is the global
market leading provider of commercial communications satellites,
serving a global customer base. The acquisition transforms MDA into a
major player in commercial communications and provides the Company with
critical mass in the U.S. market.
"This is a game changing transaction for our Company," said Daniel
Friedmann, MDA's president and CEO. "With one move, we are bringing
together two market leaders to create a unique global communications
and information company with a strong commercial focus.
Post-acquisition, more than two-thirds of MDA's total revenues will
come from the commercial market."
The transaction meets MDA's long-term objective of gaining a stronger
presence in the U.S. market. SS/L has a U.S.-based workforce of 3,200
highly skilled employees, and over one million square feet of
state-of-the-art facilities. SS/L will continue to operate under its
well-established brand and proven management team.
Following the acquisition, MDA will have combined annual revenues of
$1.9 billion (calendar year 2011), and a combined backlog of $2.8
billion (March 31, 2012). The acquisition is also expected to provide
global opportunities for future growth as MDA enters markets fuelled by
some of today's most compelling consumer communications needs.
"Space Systems/Loral's business is fundamentally driven by the worldwide
demand for television, digital audio, broadband Internet, mobile
communications, and voice telephony," said Friedmann. "Billions of
people around the world depend on these services and demand continues
to increase. By acquiring one of the major companies that enable these
essential communications services, MDA will move immediately to the
forefront of this growing business."
SS/L has gained a strong market presence serving major commercial
satellite operators and has been awarded more commercial satellite
contracts worldwide than any other company since 2005 (Futron Satellite Orders Report). SS/L revenues for 2011 were US$1.1 billion, with pro-forma operating
EBITDA of US$153 million. SS/L has a backlog of US$2 billion (March 31,
2012), providing good revenue visibility going forward.
"The combination of Space Systems/Loral's world-class commercial
communications expertise with MDA's strengths in essential information
solutions provides exciting opportunities for growth for the new
company and continuous strong support to our current and future
customers' business," said John Celli, president of Space
Transaction Details and Process
Loral Space & Communications Inc., the parent company of SS/L, and MDA
have executed a definitive agreement. The boards of directors of MDA
and Loral have each unanimously approved the terms of the agreement.
The agreement is also subject to applicable regulatory approvals and
certain closing conditions customary for this type of transaction.
Subject to satisfying those approvals and closing conditions, the
transaction is expected to be completed in a few months.
"This transaction is structured to provide MDA with a full tax step-up
for the purchase price for U.S. tax purposes and the transaction is
also immediately accretive to MDA's earnings per share," said
Anil Wirasekara, MDA's executive vice-president and CFO. MDA will
finance the transaction with cash on hand, a three-year note payable
for US$101 million, and approximately US$500 million of borrowings
under a new $1.1 billion fully committed and underwritten credit
facility from RBC Capital Markets. The credit facility has an accordion
feature to borrow an additional US$250 million. "Post transaction, MDA
will maintain a prudent leverage ratio and will continue to have more
than adequate capital to fund further growth opportunities," said
BofA Merrill Lynch is acting as lead financial advisor to MDA in
connection with the transaction. RBC Capital Markets also provided
financial advice to MDA related to this transaction.
Investor Conference Call and Webcast
MDA will host a conference call and webcast on June 27, 2012 at 5:30
a.m. Pacific (8:30 a.m. Eastern), featuring remarks by Daniel
Friedmann, president and CEO, and Anil Wirasekara, executive
vice-president and CFO. A slide presentation will be available for
viewing during the conference call and webcast. To access this slide
presentation, please visit the following link: http://w.on24.com/r.htm?e=489675&s=1&k=C7C4B9FCA4D21E0B6BD61DE16B782582
Following the presentation, there will be an interactive question and
To participate in the question and answer session, please call the
conference line approximately five minutes prior to the commencement of
Canada or the United States: 1-888-231-8191
MDA provides advanced information solutions that capture and process
vast amounts of data, produce essential information, and improve the
decision making and operational performance of business and government
Focused on markets and customers with strong repeat business potential,
MDA delivers a broad spectrum of information solutions, ranging from
complex operational systems, to tailored information services, to
electronic information products.
The Company's common shares trade on the Toronto Stock Exchange under
the symbol TSX:MDA.
Caution Regarding Forward Looking Information and Other Matters
This press release contains certain forward-looking statements and
information which reflect the current view of MacDonald, Dettwiler and
Associates Ltd. (the "Company" or "MDA") with respect to future events
and financial performance. Forward-looking statements generally can be
identified by the use of forward-looking terminology such as "may",
"will", "would", "could", "should", "expect", "intend", "estimate",
"anticipate", "plan", "foresee", "believe" or "continue", or the
negatives of such terms or variations of them or similar terminology.
The forward-looking statements in this press release are based on MDA's
current expectations, estimates, projections and assumptions made in
light of its experience and perception of historical trends.
Forward-looking statements are subject to risks and uncertainties, many
of which are beyond MDA's control and the effects of which can be
difficult to predict. MDA's actual results of operations could differ
materially from historical results or current expectations.
With regard to MDA's proposed acquisition of Space Systems/Loral, Inc.
(SS/L), there can be no assurance that MDA will realize the anticipated
benefits or results due to a variety of factors, including: inability
to complete the acquisition in the timeframe anticipated or at all;
inability to obtain governmental approvals of the transaction or
satisfy other conditions to the transaction on the proposed terms and
timeframe; the terms of the proposed transaction may need to be
modified to obtain governmental approvals of the transaction or satisfy
other conditions to the transaction; the ability to promptly and
effectively integrate the businesses of MDA and SS/L; higher than
anticipated integration costs; diversion of management time on
acquisition-related issues; and failure to obtain the consent or other
agreement of certain counterparties whose consent or agreement is
required in order for MDA to acquire certain business relationships.
The anticipated benefits from the proposed transaction, such as it
being accretive to earnings, expanding the Company's presence and
creating synergies and new opportunities for growth may not be realized
in the time frame anticipated or at all as a result of several factors
including changes in general economic and market conditions, laws and
regulations and their enforcement, and the degree of competition in the
geographic and business areas in which SS/L operates. Assumptions about
current and expected capital requirements, SS/L revenues and expenses,
the potential for earnings growth as well as costs associated with the
transaction and expected synergies were material factors considered in
estimating the internal rate of return to MDA and its estimate of the
acquired business being accretive to MDA's earnings. Assumptions about
our integration plan, the efficiency and duration of integration and
the alignment of organizational responsibilities were material factors
we considered in estimating transaction and integration costs.
Other risks that could cause actual results to differ from current
expectations include: changes in government priorities, funding levels,
contracts and regulations; failure of third parties and subcontractors
to complete contracts for which the Company is the prime contractor;
risks of performance on firm fixed-price construction contracts;
changes in estimates of total revenues and costs on contracts;
potential for product liability or the occurrence of defects in
software and other products and resulting loss of revenue and loss of
the Company's reputation; quality issues and failure of systems to meet
performance requirements; failure of the Company to manage its
acquisitions and breaches of contracts and indemnities and related
risks on divestitures; satellite failure; dependence on electronic
systems and data and system security threats; detrimental reliance on
third parties for data; dependence on key employees, potential for work
stoppages and lack of oversight over a U.S. proxy board and management;
failure to anticipate changes in technology, technical standards and
offerings or comply with the requisite standards; failure to maintain
technological advances and market positions; significant competition;
potential infringement of the intellectual property rights of others
through licensed software or otherwise; inadequate protection of the
Company's intellectual property rights; exposure to foreign currency
fluctuations; changes in economic and political conditions; inability
of suppliers or subcontractors to effect technology transfer; changes
in customer security requirements and the resulting cancellation of
contracts; failure to maintain business alliances; uncertainty in
financing arrangements; failure of counterparties in financing
arrangements and financial derivative contracts; wrongful call on
letters of credit and performance bonds; and insufficient insurance
against material claims or losses. We caution that the preceding list
is not exhaustive of all possible risk factors and other factors could
also adversely affect MDA's results.
You are referred to the risk factors described in MDA's most recent
annual Management's Discussion and Analysis, Annual Information Form
and other documents on file with the Canadian securities regulatory
authorities, available on SEDAR, www.sedar.com or www.mdacorporation.com. All such factors should be considered carefully, as well as other
uncertainties and potential events, and the inherent uncertainty of
forward-looking statements, when making decisions with respect to MDA.
The forward-looking statements and information contained in this press
release represent MDA's views only as of today's date. All such
statements are made pursuant to the "safe harbour" provisions of
applicable Canadian and U.S. securities laws. MDA disclaims any
intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise, other than as required by law, rule or regulation. You
should not place undue reliance on forward-looking statements.
The Toronto Stock Exchange has neither approved nor disapproved the form
or content of this release.