The Gulf Time Newspaper One of the finest business newspapers in the UAE brought to you by our professional writers and editors.
Bloomberg
Canadian satellite technology firm MacDonald Dettwiler & Associates Ltd. agreed to acquire DigitalGlobe Inc. in a cash and stock deal worth C$3.1 billion ($2.4 billion), doubling the company’s size and giving itself new access to lucrative US government customers.
DigitalGlobe shareholders will receive $17.50 in cash and 0.3132 MDA shares representing a premium of about 18 percent of the company’s closing share price on February 16, according to a statement on Friday. MDA will also assume about C$1.6 billion of Westminster, Colorado-based DigitalGlobe’s debt. DigitalGlobe’s shares fell 8.2 percent to $31.25 at
4 p.m. in New York.
MDA dropped 7.3 percent to C$63.96 in Toronto, its biggest drop since November, dragged down by dilution concerns to fund what would be MDA’s biggest purchase to date.
The deal consolidates two of the industry’s older and bigger players as new upstarts such as San Francisco-based Planet Labs Inc. try to stake out a position in the growing market for images of Earth. DigitalGlobe, Planet Labs and Vancouver-based UrtheCast Corp. are in a space race to provide the best images for a growing list of customers, from forest managers tracking wildfires to financial analysts who want to predict Wal-Mart’s quarterly revenue based on how many cars were parked at its stores.
Combining DigitalGlobe’s satellites and expertise in analyzing images with MDA’s ground stations and communications tech will allow the two to offer more services at better prices, said Eric Gundersen, chief executive officer of mapping startup Mapbox, which buys images from DigitalGlobe.