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Will GOGO Stock Benefit From Satcom Direct Buyout Deal?
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Gogo Inc. (GOGO - Free Report) recently announced a definitive deal to acquire Satcom Direct for $375 million cash and five million GOGO shares at closing. In addition, Satcom Direct is entitled to receive an additional $225 million contingent to certain performance thresholds over the next four years.
Satcom Direct has an extensive international sales and service footprint and operates as the leading global Business Aviation (BA) geostationary (GEO) satellite in-flight connectivity service provider. With this deal, Gogo aims to establish itself as the only in-flight connectivity provider that can address the performance and cost requirements of the global BA and military and government mobility markets.
GOGO Expanding Footprint in the Business Aviation Market
The demand for inflight connectivity has witnessed exponential growth as passengers expect reliable connections for seamless connectivity for streaming, web browsing and more. Gogo's advanced 5G network, supported by more than 159 sites, including nine in Canada, promises to deliver superior inflight entertainment and connectivity services.
By combining Satcom Direct assets, Gogo will likely establish a comprehensive product line encompassing LEO (Low Earth Orbit), GEO Orbit, and ATG (Air-To-Ground) solutions tailored for the business aviation sector. This acquisition is expected to drive revenue growth across various market segments, from North America’s ATG for basic connectivity to advanced multi-orbit LEO-GEO solutions leveraging Gogo Galileo and Satcom Direct’s cutting-edge Plane Simple GEO technology. Additionally, the enhanced customer support team is expected to improve service for worldwide customers of the combined entity, further accelerating sales of Gogo Galileo.
The acquisition will also likely allow Gogo to enter the rapidly expanding military and government mobility vertical. Satcom Direct’s established products and expertise are expected to diversify Gogo's revenue streams, creating new growth opportunities with unique integrated LEO-GEO solutions for military and governmental clients.
Moreover, the complementary positions in original equipment manufacturing (OEM) and aftermarket services are expected to enhance recurring revenues, bolstering long-term customer relationships. Post-acquisition, the combined entity will be positioned as a leading provider across more OEM aircraft models and will benefit from the largest aftermarket dealer network and relationships with fractional, charter and managed fleets.
Will the Acquisition Aid GOGO Stock ?
This acquisition marks a pivotal moment for Gogo as it seeks to redefine its offerings in the in-flight connectivity landscape, combining forces with Satcom Direct to create a comprehensive suite of solutions tailored to the evolving needs of business aviation and government sectors. It is expected to significantly strengthen Gogo’s financial profile, with a pro forma revenue projection of approximately $890 million for 2024, an adjusted EBITDA margin of around 24%, and free cash flow exceeding $100 million. This is likely to propel the stock on incremental revenue generation and steady cash flow.
GOGO’s Stock Price Performance
Shares of Gogo have lost 38.8% over the past year against the industry’s growth of 45.9%.
Image Source: Zacks Investment Research
GOGO’s Zacks Rank and Key Picks
Gogo currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader industry have been discussed below.
Ubiquiti Inc. (UI - Free Report) sports a Zacks Rank #1 (Strong Buy) at present. Its highly flexible global business model remains apt to adapt to the changing market dynamics to overcome challenges while maximizing growth. You can see the complete list of today’s Zacks #1 Rank stocks here.
UI’s excellent global business model, which is flexible and adaptable to evolving changes in markets, helps it to beat challenges and maximize growth. The company’s effective management of its strong global network of more than 100 distributors and master resellers improved its visibility for future demand and inventory management techniques. In the last reported quarter, Ubiquiti delivered an earnings surprise of 4.19%.
Workday Inc. (WDAY - Free Report) sports a Zacks Rank #1 at present. In the last reported quarter, it delivered an earnings surprise of 7.36%. WDAY is a leading provider of enterprise-level software solutions for financial management and human resource domains.
Airgain, Inc. (AIRG - Free Report) currently carries a Zacks Rank #2 (Buy). It has a long-term earnings growth expectation of 35%.
Based in San Diego, CA, Airgain provides antenna products as integrated wireless solutions. These devices are designed to address vital connectivity requirements during product development and throughout the entire lifecycle of other industries, such as automotive and consumer, in addition to various sectors within an enterprise.
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Will GOGO Stock Benefit From Satcom Direct Buyout Deal?
Gogo Inc. (GOGO - Free Report) recently announced a definitive deal to acquire Satcom Direct for $375 million cash and five million GOGO shares at closing. In addition, Satcom Direct is entitled to receive an additional $225 million contingent to certain performance thresholds over the next four years.
Satcom Direct has an extensive international sales and service footprint and operates as the leading global Business Aviation (BA) geostationary (GEO) satellite in-flight connectivity service provider. With this deal, Gogo aims to establish itself as the only in-flight connectivity provider that can address the performance and cost requirements of the global BA and military and government mobility markets.
GOGO Expanding Footprint in the Business Aviation Market
The demand for inflight connectivity has witnessed exponential growth as passengers expect reliable connections for seamless connectivity for streaming, web browsing and more. Gogo's advanced 5G network, supported by more than 159 sites, including nine in Canada, promises to deliver superior inflight entertainment and connectivity services.
By combining Satcom Direct assets, Gogo will likely establish a comprehensive product line encompassing LEO (Low Earth Orbit), GEO Orbit, and ATG (Air-To-Ground) solutions tailored for the business aviation sector. This acquisition is expected to drive revenue growth across various market segments, from North America’s ATG for basic connectivity to advanced multi-orbit LEO-GEO solutions leveraging Gogo Galileo and Satcom Direct’s cutting-edge Plane Simple GEO technology. Additionally, the enhanced customer support team is expected to improve service for worldwide customers of the combined entity, further accelerating sales of Gogo Galileo.
The acquisition will also likely allow Gogo to enter the rapidly expanding military and government mobility vertical. Satcom Direct’s established products and expertise are expected to diversify Gogo's revenue streams, creating new growth opportunities with unique integrated LEO-GEO solutions for military and governmental clients.
Moreover, the complementary positions in original equipment manufacturing (OEM) and aftermarket services are expected to enhance recurring revenues, bolstering long-term customer relationships. Post-acquisition, the combined entity will be positioned as a leading provider across more OEM aircraft models and will benefit from the largest aftermarket dealer network and relationships with fractional, charter and managed fleets.
Will the Acquisition Aid GOGO Stock ?
This acquisition marks a pivotal moment for Gogo as it seeks to redefine its offerings in the in-flight connectivity landscape, combining forces with Satcom Direct to create a comprehensive suite of solutions tailored to the evolving needs of business aviation and government sectors. It is expected to significantly strengthen Gogo’s financial profile, with a pro forma revenue projection of approximately $890 million for 2024, an adjusted EBITDA margin of around 24%, and free cash flow exceeding $100 million. This is likely to propel the stock on incremental revenue generation and steady cash flow.
GOGO’s Stock Price Performance
Shares of Gogo have lost 38.8% over the past year against the industry’s growth of 45.9%.
Image Source: Zacks Investment Research
GOGO’s Zacks Rank and Key Picks
Gogo currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader industry have been discussed below.
Ubiquiti Inc. (UI - Free Report) sports a Zacks Rank #1 (Strong Buy) at present. Its highly flexible global business model remains apt to adapt to the changing market dynamics to overcome challenges while maximizing growth. You can see the complete list of today’s Zacks #1 Rank stocks here.
UI’s excellent global business model, which is flexible and adaptable to evolving changes in markets, helps it to beat challenges and maximize growth. The company’s effective management of its strong global network of more than 100 distributors and master resellers improved its visibility for future demand and inventory management techniques. In the last reported quarter, Ubiquiti delivered an earnings surprise of 4.19%.
Workday Inc. (WDAY - Free Report) sports a Zacks Rank #1 at present. In the last reported quarter, it delivered an earnings surprise of 7.36%. WDAY is a leading provider of enterprise-level software solutions for financial management and human resource domains.
Airgain, Inc. (AIRG - Free Report) currently carries a Zacks Rank #2 (Buy). It has a long-term earnings growth expectation of 35%.
Based in San Diego, CA, Airgain provides antenna products as integrated wireless solutions. These devices are designed to address vital connectivity requirements during product development and throughout the entire lifecycle of other industries, such as automotive and consumer, in addition to various sectors within an enterprise.