Brampton’s MDA Space will increase its offer to merge with SatixFy Communications – an Israeli satellite chipset manufacturer – after a rival bidder emerged for the purchase, the companies announced Tuesday (May 20).
The third party, who was not disclosed, came forward during a 45-day “go-shop” period that expired May 16. SatixFy had contacted 75 entities through its financial advisor, TD Securities, as part of the merger agreement to determine outside interest in making an acquisition proposal, according to an MDA statement.
After this counteroffer, the Brampton-based company plans to purchase SatixFy with an all-cash offer increased by 43% since the proposed merger was first announced publicly on April 1. This includes buying out SatixFy’s USD $76 million in debt, with a total approximate value transaction of $356 million USD ($493 million CAD).
The new aggregate equity value for the SatixFy is now $280 million USD ($388 million CAD) – compared with $193 million ($267 million CAD) under the original terms released April 1. In terms of price per ordinary share, the new value is $3 USD, up from $2.10 USD in the same time period.
The counteroffer from the undisclosed third party “would imply aggregate equity consideration of approximately US$233.5 million, or approximately US$2.53 per ordinary share,” MDA stated. This proposal also included a way to limit stock price fluctuations during the merger.
MDA’s statement noted that their company “disputed the validity of SatixFy’s notice of the acquisition proposal,” but as the statement shows they nevertheless raised their offer in response.
The new deal between SatixFy and MDA “is based upon the commitment by the company not to consider any other acquisition proposals for SatixFy and for SatixFy’s Board of Directors … not to change its recommendation supporting the merger agreement, as amended,” MDA added.
Shareholders of SatixFy will meet on May 23 to consider the proposal – a delay of three days “to allow sufficient time under applicable laws, rules and regulations for the announcement and distribution of the disclosures set forth herein,” the statement noted.
“Shareholders holding approximately 57% of SatixFy outstanding shares have entered into voting support agreements pursuant to which they have committed to vote in favor of the transaction,” MDA added.
This deal has likely been a long time in coming as back in August 2023, MDA announced it would acquire the digital payload division of SatixFy Communications. The new transaction, if approved, would see MDA Space merge with the rest of the company.
MDA previously stated in April that the transaction “is expected to further enhance the end-to-end satellite systems offering of MDA Space as demand for next generation digital satellite communications continues to accelerate.”
The company highlighted MDA Aurora LEO and MEO satellites as one beneficiary of the new chips, while also noting SatixFy would bring technical expertise and a “technology roadmap” for software defined digital satellites, among other benefits.
“Similar to MDA Space, SatixFy is an innovation company at its core,” MDA CEO Mike Greenley said in the April statement. “Bringing these two highly skilled teams together adds complementary expertise and technology that will allow us to further enhance our value proposition for current and future customers, by providing vertically integrated and differentiated digital satellite solutions.”
SatixFy’s CEO, Nir Barkan, added in April that the transaction “will provide the scale, resources, and stability needed to continue delivering groundbreaking solutions for our customers.” Assuming the acquisition is approved, it should close in the third quarter of 2025.
