Global Eagle, the parent company of Priva, the superyacht connectivity and content specialist, has announced that it has agreed to an investment of funds managed by Searchlight Capital Partners (Searchlight), a global investment firm.
“We are pleased to announce this agreement with Searchlight and believe that this investment will significantly strengthen our liquidity and create a capital structure to support our growth initiatives, positioning us to deliver significant long-term shareholder value,” comments Jeff Leddy, CEO of Global Eagle. “Searchlight brings a wealth of technology and operational expertise, and we are excited to partner with them as we drive our company to the next level of performance and profitability.”
Searchlight will invest $150 million of new capital into Global Eagle. Searchlight will receive $150 million aggregate principal amount of the Company’s new second-lien notes due June 30, 2023. The notes include initial payment-in-kind interest at 12 per cent per annum that later converts to payment in cash at 10 per cent per annum. Searchlight will receive a warrant to purchase approximately 18.1 million shares of Global Eagle common stock for $0.01 per share. This warrant is not exercisable until January 1, 2021, and only then if the 45-day VWAP of the Company’s common stock has been at or above $4.00 per share following the closing. Searchlight will also receive a “market warrant” to purchase an additional 13.0 million shares of Global Eagle common stock for $1.57 per share.
The market warrant is not exercisable until January 1, 2021, and only then if the 45-day VWAP of the Company’s common stock has been at or above $2.40 per share following the closing. Searchlight may not transfer the notes, the warrants or the shares underlying the warrants to an unaffiliated third party before January 1, 2021. Nasdaq has completed its review of the transaction, and the Company anticipates that the transaction will close before March 31, 2018.
“We are excited to partner with Global Eagle as it continues to deliver market-leading solutions to the aviation, maritime and land market for content and connectivity,” explains Eric Zinterhofer, founding partner at Searchlight. “We see significant opportunities as the company continues to drive growth and innovation in its markets.”
Global Eagle expects that the net proceeds from the transaction will be approximately $142 million, after payment of fees and expenses, which will significantly strengthen the Company’s balance sheet and liquidity. The Company intends to use a portion of the proceeds to repay the full $78 million principal balance on the Company’s revolving credit facility, following which the full $85 million facility will remain available to the Company. The Company anticipates using the remaining proceeds for growth initiatives and other general corporate purposes.
In 2017, Global Eagle introduced the superyacht market to Priva, formerly MTN. Priva aims to service clients across a host of assets, on land at a private villa, at sea on a superyacht, and in the air on a private yet, with connectivity and content services.
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