Telesat is beginning the sale of satellite services company Infosat Communications, in a transaction announced Tuesday (Sept. 3).
Telesat completed the transaction with Infosat’s new parent company, Calgary-based communications equipment provider Network Innovations. The sale will be finished in phases due to regulatory approvals, Network Innovations said in a statement, but “the vast majority” of the assets closed on Sept. 1.
“We are honored that Telesat has selected Network Innovations for this transaction, and we look forward to continuing to develop our relationship with this key satellite operator. Opportunities to acquire strong franchises and teams, such as those of Infosat Communications, rarely come along,” Derek Dawson, Network Innovations’ co-CEO and group president, added in the statement.
Network Innovations’ technologies span numerous type of satellite services, with examples including L-band, cellular services and wi-fi networks. It was founded in 1989 initially as a terrestrial communications company, but pivoted to satellite as those services became more available. Acquiring Infosat will particularly help with network connectivity in low Earth orbit, Dawson added in his statement.
“Infosat’s expertise complements our own,” Dawson said, “and we are confident this acquisition will enhance the creation and delivery of reliable communication solutions and services to enterprise and maritime clients across North America. We are excited to welcome Infosat to the Network Innovations family, and we look forward to serving its customers.”
The acquisition took place for an undisclosed amount of money. Telesat has not issued a statement on its website, but CEO Dan Goldberg said weeks ago that the company was considering selling a “non-core business” to raise revenues and that it would be contributing something like $10 million to Telesat’s bottom line.
“We’re giving consideration to selling a non-core business that we own, and that could potentially get done in the near term,” Goldberg told investors Aug. 14 during a conference call discussing Telesat’s second-quarter results. “It would be impactful for this year. It contributes revenue. It doesn’t contribute a whole lot of EBITDA to us, but if we were to do that, [it] would weigh somewhat on the top line at least.”
Telesat’s focus has been preparing to fund the Lightspeed low Earth orbit constellation particularly focused on government and enterprise customers, which was delayed due to technical issues as well as supply chain problems induced by the pandemic. In response, Telesat reduced the size of the first phase of the constellation, while emphasizing that the adjusted number of satellites would be more than enough to meet current customer needs.
Telesat has consistently been targeting a 2026 launch for several quarters. Goldberg told investors Aug. 14 that there will be “news in the next couple of weeks” about Quebec provincial and Canadian federal funding for Lightspeed. “We are optimistic that we remain on track to achieve this timing,” he added.
