Viasat considering sale of part of government services unit

(Bloomberg) – Viasat Inc., the geostationary satellite company, is considering selling part of its government services unit, according to people with knowledge of the matter.

The company is working with a field adviser for the part of the division that provides the encryption technology, which could fetch up to $1.8 billion, said the people, who asked not to be identified because they were not allowed to speak publicly.

The venture, which is expected to attract interest from other defense companies and private equity firms, generates about $120 million in annual earnings before interest, taxes, depreciation and amortization, the sources said. The unit provides products that help customers, including government, encrypt communications.

Viasat has not made a final decision on the sale and its plans could still change, the sources said.

“Viasat does not comment on speculation or rumors related to potential corporate acquisition or sale transactions,” a representative for the Carlsbad, Calif.-based company said in an emailed statement.

Viasat rose 2.3% to close at $28.68 in New York on Tuesday, giving the company a market value of around $2.2 billion.

The deliberations come as Viasat seeks to complete its purchase of counterpart Inmarsat Group Holdings Ltd., creating a company with a fleet of 19 satellites, with 10 more under construction for launch within the next three years. The deal was seen by the market as an attempt to counter growing competition from companies such as Elon Musk’s Starlink and OneWeb, which is partly backed by the UK government.

The UK Competition and Markets Authority has opened an investigation into the acquisition of Inmarsat by Viasat.

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Ashley C. Reynolds