Digitalglobe, Inc. (DGI) to Acquire The Radiant Group for $140M

October 11, 2016 7:01 AM EDT

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DigitalGlobe, Inc. (NYSE: DGI) signed a definitive agreement to acquire privately held The Radiant Group, Inc. from Aston Capital for $140 million in cash.

The acquisition of Radiant combines two industry leaders recognized for delivering innovative solutions that help customers harness the power of Earth imagery and other forms of geospatial information. Upon completing the transaction, DigitalGlobe will strengthen its position as the leading commercial source of geospatial information and insight with the capability and scale to address the needs of the world’s largest and most sophisticated customers. The combined DigitalGlobe Services business will support critical national security missions with an expanded portfolio of advanced capabilities that extend across the entire geospatial intelligence value chain.

Headquartered in Chantilly, Virginia, Radiant has built a strong and growing presence within the U.S. Intelligence Community and has contracts with the National Reconnaissance Office (NRO), National Geospatial-Intelligence Agency (NGA), Defense Intelligence Agency (DIA) and Special Operations Command (SOCOM).

“The acquisition of The Radiant Group represents an important step in deriving new insights for customers from DigitalGlobe’s imagery and other geospatial information sources,” said Jeffrey R. Tarr, Chief Executive Officer of DigitalGlobe. “Combining Radiant with DigitalGlobe greatly enhances both organizations’ capabilities, expands our customer base across the U.S. Intelligence Community and increases our access to contract vehicles. Importantly, this acquisition also brings together hundreds of innovative developers and analysts with expertise in geospatial big data and analytics. Combined with the world’s most advanced commercial Earth-imaging capability, unrivaled archive and platforms, these capabilities position us to deliver more value to customers and shareowners.”

“We are proud to have built Radiant into an innovative technology and analytics business with a proven track record supporting Defense and Intelligence Customers,” said Bobby Basil, a partner at Aston Capital. “The acquisition will expand DigitalGlobe’s customer base across the Intelligence Community, and simultaneously accelerate the pace of innovation in big data analytics and machine learning at the company. This is a very exciting development for the industry.”

Strategic and Financial Benefits of the Transaction

  • Broadens DigitalGlobe’s capabilities across the entire geospatial intelligence value chain, including smart tasking, collection, processing, big data analytics and delivery of insights.
  • Brings together hundreds of innovative developers and analysts with expertise in big data analytics, cloud computing and machine learning to solve complex geospatial intelligence challenges.
  • Expands DigitalGlobe’s customer base across the U.S. Intelligence and Special Operations Communities through more than 80 additional contract vehicles and deepens the company’s relationship with its largest customer.
  • Diversifies revenue, reduces asset intensity and is accretive to growth in revenue, EBITDA, net income and other key financial metrics.

Financial Profile and Transaction Details

  • Total cash consideration of $140 million.
  • To be funded with cash on hand and drawings under existing revolving line of credit.
  • Reaffirm commitment to completing share repurchase program.
  • Expected 2016 Radiant revenue of approximately $100 million.
  • Historical Radiant organic revenue growth above 10%.
  • Closing expected by end of 2016, subject to satisfaction of customary closing conditions and regulatory approvals.

Advisers

O’Melveny & Myers LLP is serving as legal counsel to DigitalGlobe. DLA Piper is serving as legal counsel to Radiant.

Conference Call and Webcast

DigitalGlobe will host a conference call to discuss the transaction beginning at 8:30 a.m. ET on October, 11, 2016.

The conference call dial-in numbers are as follows:U.S./Canada dial-in: (855) 212-2368International dial-in: (315) 625-6886Passcode: 97042624

DigitalGlobe will also sponsor a live and archived webcast of the conference call on the Investor Relations portion of its website. Click here to directly access the live webcast. Supplemental materials, including conference call slides and management scripts, are available on the Investor Relations section of the company’s website at www.digitalglobe.com.



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