CABL Forum - Intelsat, a global leader

Intelsat, Ltd was sold yesterday to a consortium of four private investors for US$5 billion marking the completion of the company’s transformation to a private company.

In a transaction unanimously approved by the company’s Board of Directors, Intelsat signed a definitive agreement that provides for the amalgamation under Bermuda law of Intelsat and a subsidiary of Zeus Holdings Limited, a company formed by a consortium of private equity groups: Apax Partners, Apollo Management, Madison Dearborn Partners and Permira.

The total value of the transaction, including approximately $2 billion of existing debt, is approximately $5 billion.

Intelsat for most of its 40 years, it has been owned and governed by companies representing 145 governments around the world. It is mostly known for transmitting the world's first satellite phone call, for carrying live international television broadcasts of the Olympics, and for transmitting the 1969 Apollo 11 moon landing around the world.

If the deal wins regulatory and shareholder approval, Zeus will be acquiring Intelsat, and Intelsat's current shareholders will be entitled to receive $18.75 for each Intelsat share issued, according to an Intelsat news release. Intelsat expects to obtain all required approvals and closing to occur as early as the end of 2004.

"This transaction comes at a time when Intelsat is successfully executing on its strategies for market leadership in the fixed satellite services sector. We believe that the acquisition of Intelsat by this consortium of well-respected private equity investors represents the best opportunity for Intelsat to achieve its strategic goals," said Intelsat, Ltd. Chief Executive Officer Conny Kullman.

"Once completed, this transaction will both satisfy our shareholders' interest in a strong valuation and allow shareholders to monetize their investments. At the same time, the deal will align Intelsat's future with a force that can make our vision for continued leadership a reality."

"Our consortium is very pleased to begin a partnership with Intelsat, a global leader in the fixed satellite services sector. Intelsat's healthy, young and flexible satellite fleet, seasoned management team, strong brand and solid backlog of long-term contracts create a very attractive investment opportunity," said the representatives of the consortium.

Intelsat said all of the existing service commitments between Intelsat and its customers, including those dating from the privatization in 2001, will remain in force.

A general meeting of shareholders is expected to be held later this year to approve the deal, which requires the approval of shareholders holding 60% of Intelsat's outstanding shares.

With over 30 years of direct investing experience, Apax Partners operates across Europe, Israel, the United States and Japan providing long-term equity financing to entrepreneurs to build and strengthen world-class companies. Apollo, founded in 1990, is among the most active and successful private investment firms in the U.S. in terms of both number of investment transactions completed and aggregate dollars invested. Since its inception, Apollo has managed the investment of an aggregate of approximately $13 billion in equity capital in a wide variety of industries, both domestically and internationally.

Madison Dearborn Partners (MDP), based in Chicago, is one of the largest and most experienced private equity firms in the United States. MDP has approximately $8 billion of equity capital under management and makes new investments through its most recent fund, Madison Dearborn Capital Partners IV, L.P., a $4.0 billion fund raised in 2001.

MDP focuses on management buyout and other private equity investments across a broad spectrum of industries, including basic industries, communications, consumer, financial services and healthcare. Over the last decade, MDP has been an active investor in the communications industry, with investments in such companies as Omnipoint Corporation, Nextel Partners, Telemundo Communications Group, Clearnet Communications, and XM Satellite Radio, Inc.

Permira is a private equity firm advising funds of $13 billion, including Permira Europe III, a E5.1 billion fund raised in 2003. Permira is an independent business with offices in Frankfurt, London, Madrid, Milan, New York, Paris and Stockholm, focusing on buyout transactions across a number of sectors, including technology & telecom, consumer, business services, chemicals, industrial products and services, and healthcare.

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Intelsat, a global leader