Canada's MDA to buy US satellite imagery provider DigitalGlobe for $2.4 bn

Canadian communications and information company MacDonald Dettwiler and Associates Ltd (MDA), yesterday struck a deal to buy US-based satellite imagery provider DigitalGlobe Inc for about C$3.10 billion ($2.40 billion).

Under the terms of the proposed acquisition, MDA will pay DigitalGlobe shareholders $17.50 in cash and 0.3132 of its shares for each share held, taking the total offer to $35 per share based on its stock's closing pricing on 16 February before reports of a potential deal emerged

The offer, which includes assumption of DigitalGlobe's debt of C$1.60 billion, represents a premium of 2.8 per cent to DigitalGlobe's close of $34.05 on Thursday.

MDA will pay a reverse-termination fee of $150 million to DigitalGlobe if the deal is blocked by the US regulators.

MDA said that the merger will bring together complementary space-related capabilities, creating a stronger company positioned to capture growth in the US, Canadian and global earth observation and geospatial services markets.

''Today's announcement creates a new company that will lead the industry, offering space systems and imaging solutions from inception to execution, able to make design decisions with our customer's needs in mind,'' said Howard Lance, president and CEO of MDA.

''This combination has the scale, resources and technology to serve the large and increasingly complex needs of government and commercial customers globally. By combining MDA and DigitalGlobe, we are significantly expanding our total addressable market by broadening both companies capabilities and facilitating future growth,'' he added.

Colorado-based DigitalGlobe is a global provider of high-resolution Earth-imagery products and services.

Its imagery solutions support a wide variety of users in defence and intelligence, civil agencies, mapping and analysis, environmental monitoring, oil and gas exploration, infrastructure management, Internet portals, and navigation technology.

It generates over 62 per cent of its revenue from US government contracts.

Founded in 1969 and based in British Colombia, MDA offers space-based solutions for global delivery of direct-to-home television, satellite radio, broadband internet, and mobile communications.

MDA's global customer base is served by more than 4,800 employees operating from 15 locations in the US, Canada, and internationally.