Global Eagle Entertainment Inc. announced on July 27 that it had completed its previously announced acquisition of Emerging Markets Communications (EMC), a leading provider of communications services to the cruise industry.
According to a prepared release, the combination of GEE and EMC creates one of the world’s largest providers of satellite-based connectivity and media to the global mobility market. G
“This is a transformational acquisition for our company and in our industry,” said GEE Chief Executive Officer Dave Davis. “The combination of GEE and EMC enables us to provide our customers with a breadth of products and services unmatched in the markets we serve, whether in the air, at sea, or on land. GEE will continue to strive to be customer focused, product driven, and operationally excellent.”
GEE has a successful track record of integrating acquisitions and achieving synergies. With EMC, the Company expects to realize synergies of $15 million in 2017, growing to $40 million in 2018 and thereafter. A major source of savings is expected to come from network efficiencies, including the ability to optimize bandwidth costs through a consolidation of existing network assets, including space segment and ground infrastructure, as well as better capacity utilization. Savings are also expected through reductions in SG&A spending and the consolidation of facilities.
In addition to cost savings, GEE expects the combination to generate significant revenue synergies. Driving sales of GEE’s media, software, advertising and operations solutions products in the underserved maritime market are a key objective of the Company. GEE’s digital media team has had a long-term relationship with EMC and expects to launch new products to major cruise lines before year-end. EMC’s proprietary technologies are in use today to improve the connectivity experience and optimize bandwidth usage in the maritime market. GEE will soon introduce these technologies into the aviation market.
Dave Davis will continue to lead GEE as CEO. Abel Avellan, founder and CEO of EMC, will serve as President and Chief Strategy Officer of GEE. As part of the transaction, ABRY Partners, EMC’s largest shareholder, has a right to nominate a director to GEE’s board.
GEE has established three operational business units including the Maritime and Land unit, which will deliver connectivity and mission critical services to cruise and ferry lines, yachts, commercial shippers and land-based users such as non-governmental organizations and mobile network operators. Through this transaction, GEE has acquired a strong maritime customer base, serving over 1,500 vessels and 100,000 cruise ship cabins. In addition to overseeing certain corporate functions at GEE, Abel Avellan will lead the Maritime and Land Business Unit.