Iridium to acquire Aireon for $366.7M

Iridium (IRDM) Communications announced that it has entered into a definitive agreement to acquire Aireon, operator of the world’s only space-based Automatic Dependent Surveillance-Broadcast air traffic surveillance system. Iridium is an existing owner of Aireon and will acquire the remaining 61% of equity interests of Aireon in the transaction for a purchase price of approximately $366.7 million from the other owners, NAV CANADA, AirNav Ireland, ENAV, NATS and Naviair. The purchase price will be paid 50% at closing and 50% on the one-year anniversary. Iridium will also assume Aireon’s outstanding debt, expected to be approximately $155 million at closing. The acquisition of Aireon is accretive to Iridium’s growth outlook; over the past three years, Aireon’s total revenue has grown at a compound annual growth rate of 10%. Iridium expects the acquisition will result in at least an additional consolidated $100 million of service revenue and $30 million of OEBITDA on an annualized basis. Iridium expects to pay the purchase price with current liquidity, including borrowings under its revolving credit facility, and future cash from operations. After closing the transaction, Iridium expects net leverage to increase to approximately 4.0 times OEBITDA during Q3 2026, with net leverage planned to return to the current levels over the subsequent twelve months. Iridium’s long-term net leverage guide of 2.0 times OEBITDA by the end of the decade remains unchanged and assumes no change in its paused share buyback program. Aireon will continue business-as-usual operations in the near term, with no planned changes to business strategy. The transaction is targeted to close in early July.