Situation
Inmarsat Ventures plc is a leading provider of global mobile satellite communications services. Inmarsat has been designing, implementing and operating satellite networks for over 23 years. Its services are used by multinational corporations, government agencies, media and international aid organisations and other enterprise level users in the maritime, land and aeronautical sectors. Its major shareholders included Telenor, Lockheed Martin, British Telecom and Deutsche Telekom.
In 1999 the Inmarsat business was privatised with the intention of conducting an IPO within approximately two years. Inmarsat made preparations to conduct an IPO on a number of occasions between the years 2000 and 2002. However, on each occasion the process had to be postponed due to uncertain market conditions.
Approach
In early 2002 ARC Associates approached a number of Europe’s leading private equity firms to try to convince them of the inherent value of the asset.
Following a further series of meetings, Apax Partners expressed interest in the ideas proposed by ARC Associates and entered into an ARC sponsored preliminary dialogue with Inmarsat’s major shareholders and Directors. The Inmarsat Directors subsequently decided that they should explore alternative ways of offering Inmarsat shareholders an opportunity to realise their investment and that this could be achieved by introducing new investors.
ARC Associates advised Apax Partners and Permira throughout the various individual negotiations and performed detailed due diligence, valuation and structure analyses until the transaction was achieved.
The Transaction
Following a competitive auction process whereby a number of private equity firms were invited to make indicative offers for Inmarsat, the Independent Directors of Inmarsat announced that they had agreed to a short period of exclusive negotiations with Apax Partners and Permira.
On 16 October 2003, Apax Partners and Permira and Inmarsat announced that the terms of the Cash Offer had been agreed (with irrevocable undertakings and statements of intent in respect of 25.06% of the issued ordinary share capital of Inmarsat), and would be implemented by way of a scheme of arrangement.