Digital Globe wraps up acquisition of GeoEye
DigitalGlobe has completed its acquisition of rival GeoEye and the company now offers a broader array of earth imagery and geospatial analysis than either company brought to market alone.
The acquisition gives satellite imagery provider DigitalGlobe a market capitalization of $2.1 billion, company officials said Jan. 31.
The antitrust section of the Justice Department reviewed the merger because it gives DigitalGlobe a monopoly, but Justice officials approved it to proceed earlier this month. Although the United States has only one commercial satellite imagery company, there are several foreign companies that furnish similar services.
When asked whether she had concerns about the merger of the two commercial satellite imagery companies at GEOINT 2012 in October, NGA Director Letitia A. Long told Defense Systems "there are concerns – not necessarily with two companies merging – but with their subcontractors."
The National Geospatial-Intelligence Agency had contracted in 2010 with both vendors for commercial imagery services through the 10-year, $7.3 billion Enhanced View program, but in June 2012 NGA told GeoEye it was significantly scaling back funding to the company through the program for budget reasons.
DigitalGlobe's satellites include WorldView-1 and WorldView-2 satellites, and the GeoEye acquisition gives it the IKONOS and GeoEye-1 satellites. The company is in the process of building the WorldView-3 and GeoEye-2 satellites.
The combined company has an expanded global presence with a larger and more diverse revenue base; a larger constellation with optimized orbits, coordinated scheduling and improved revisit rates; and better integrated imagery collection, processing and analytics capabilities, the officials said.
DigitalGlobe has a strengthened balance sheet and financial profile with more than an expected $1.5 billion in net present value of operating expense and capital synergies, with about one-third of those synergy savings related to operating expense and the balance from capital savings, the officials said.
The company expects to announce fourth quarter 2012 and full year 2012 earnings on February 26, 2013, and intends to provide full-year 2013 financial guidance at that time, they said.
William Welsh is the managing editor of Defense Systems. Follow him on Twitter: @WilliamWelsh12.