Iridium Communications ($IRDM) announced its intention to acquire Aireon, the firm behind the world’s largest satellite-based aircraft surveillance network.
The planned acquisition, announced yesterday, is part of Iridium’s effort to increase its footprint in the aircraft safety market—one of four “growth pillars” alongside IoT, PNT, and national security, according to CEO Matt Desch.
Under the deal, Iridium (which already owns 39% of Aireon) will spend $366.7M to buy the remaining 61% stake from five air navigation service providers (ANSPs).
Synergy, and other buzzwords: Aireon has been operating its Automatic Dependent Surveillance-Broadcast (ADS-B) payload on Iridium satellites since at least 2019, tracking an average of 190,000 flights per day, and serving over half of the world’s ANSPs.
The ADS-B system tracks aircraft positioning, allowing air traffic controllers to view flight data without the need for expensive ground-based radar systems.
By acquiring Aireon, Iridium hopes to leverage this capability into a more powerful offering: space-based VHF communications. The idea is to offer pilots a way to communicate with air traffic controllers in remote locations.
After joining Iridium, Aireon also expects to continue expanding its data offering, using its insight into aircraft positioning to create new tools—such as turbulence spotting, detection of GPS jamming or spoofing, and more robust flight safety and efficiency analytics.
“Bringing together surveillance, communication, and navigation PNT really will allow us to continue to not just grow in our aviation business…but allow us to really disrupt that market in a way that we can provide better service, more safety, and obviously an important global capability,” Desch told reporters on a media call yesterday.
Fine print: Under the agreement, Iridium will pay 50% of the purchase price at closing, and the rest on the one-year anniversary. Iridium will also assume approximately $155M in Aireon debt upon closing.
In return, Iridium is bringing on a business that is expected to contribute $100M+ in annualized service revenue.
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Europe has a growth-stage-capital problem.
The European space industry has blossomed in recent years, thanks to larger space and defense budgets, as well as a wider pool of space-focused VCs on the continent. But investment has largely been directed at early-stage companies.
Not a single growth-stage investment round in Europe was led by a European venture-capital firm last year, according to a report from the European Space Policy Institute. The situation has forced many European space scale-ups to look elsewhere for later-stage capital, by opening offices in the US or Asia in an attempt to attract more business—as well as VCs with deeper pockets.
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