EchoStar Satellite Services, L.L.C., a subsidiary of EchoStar Corp., and MVS Comunicaciones are teaming up to purchase Mexican Satellite Operator Satélites Mexicanos, S.A. de C.V.
Under the deal, EchoStar and MVS Comunicaciones, one of the largest media and telecommunications companies in Mexico and EchoStar's partner in the Mexican direct-to-home TV service Dish Mexico, will take ownership of Satmex, that nation's leading satellite operator that delivers video, audio and data services, through a joint venture.
According to the parties, EchoStar and MVS Comunicaciones will acquire all of the outstanding stock of Satmex for approximately $267 million in cash, plus up to $107 million in cash on the Mexican satellite operator's balance sheet at closing.
As such, there will be up to $374 million for distribution to Satmex's stakeholders. The transaction is expected to close early in the third quarter 2010.
In connection with the sale, Satmex said it intends to offer to purchase all of its outstanding senior secured notes for cash upon the closing of the sale of the Satmex shares
Established in the mid-1980s as part of a government operation before becoming a commercial organization, Satmex, which has some 200 employees, owns and operates three satellites and two satellite uplink facilities, all of which are expected to be included as part of the transaction.
"We are pleased to make this announcement with EchoStar, a major provider of satellite services in the United States with a significant and growing presence in Mexico," said Satmex CEO Patricio Northland in a statement. "Our companies have common goals in delivering satellite communications services across the Americas, and EchoStar has the dedication and expertise for continued growth."
"The Satmex acquisition provides us with a footprint over Mexico and South America and presents us the opportunity to serve a growing global demand for satellite services," noted Dean Olmstead, president of EchoStar Satellite Services L.L.C. "We look forward to leveraging our satellite operations and uplink expertise in North America to expand our fixed satellite services throughout the Americas, including the delivery of satellite Internet to rural communities."