ViaSat (VSAT) Deal to Sell Link 16 Tactical Data Links Business a 'Clear Net Positive' - Morgan Stanley
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Morgan Stanley analyst Landon Park reiterated an Equalweight rating and $34.00 price target on ViaSat (NASDAQ: VSAT) after the company agreed to sell 16 Tactical Data Links business to L3Harris for $1.958bn with expected net proceeds of $1.8bn. The analyst notes the trailing deal
multiple of 15.7x represents a ~100% premium to the ~7.5x EV/EBITDA multiple VSAT shares last closed.
"This sale represents a clear net positive for VSAT shares as elevated cash burn/leverage has been a key source of concern for investors, though other questions around competitive positioning in the satellite industry and execution risk remain unchanged by this deal," the analyst commented. "While the company already has $1.6bn of debt facilities in place related to the Inmarsat Transaction, we note that their 2028 senior notes have been trading around 15% YTW."
Shares of ViaSat closed at $30.23 yesterday.
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