Gilat Satellite Networks said that it has closed the acquisition of Stellar Blu Solutions, a US-based provider of satcom terminal products and solutions, for a consideration of USD 98 million in cash, as adjusted. Gilat expects its annual revenues from Stellar Blu to range between USD 120 million and USD 150 million in 2025, based on Stellar Blu's backlog. In addition, the acquisition is expected to be accretive on non-GAAP results for 2025, Gilat said this week.
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Gilat in the IFC Market
Furthermore, the Company estimates that once Stellar Blu reaches its target manufacturing capacity, which Gilat expects will occur during the second half of 2025, Stellar Blu's EBITDA margin is expected to be above 10 percent.
"This acquisition is a pivotal step in our strategy to expand Gilat's presence in the growing In-Flight Connectivity (IFC) market," said Gilat's CEO. "We expect Stellar Blu’s cutting-edge technologies, combined with Gilat's advanced IFC solutions to position us as a market leader for both commercial and business aviation, as well as adjacent high-end mobility markets that are ideal for Electronically Steered Antenna (ESA) applications."
Technology Synergies
The CEO added, "With the increasing demand for free, seamless, high-quality in-flight Wi-Fi and Stellar Blu's pioneering expertise in multi-orbit LEO and GEO IFC solutions, this acquisition enhances Gilat's ability to meet the most demanding service level agreements in the industry, opening up new growth opportunities in aviation and beyond."
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The company expects to deliver hundreds of Stellar Blu's Sidewinder terminals during the upcoming quarters.
Funding the Acquisition
According to the official release, although Gilat had over USD 115 million in net cash at the end of 2024, the company utilized a new secured credit line of USD 100 million from HSBC Bank USA and Bank Hapoalim to finance USD 60 million of the consideration paid at closing. The remaining USD 40 million, along with the company’s resources, will be used to cover potential earn-out payments. The three-year loan will bear interest at a rate of SOFR plus 2.6 percent to 3.35 percent.
