Following Sale, Gogo Looks To Focus Solely on Bizav

 - September 1, 2020, 9:36 AM
Oakleigh Thorne, Gogo president and CEO.

Wireless connectivity provider Gogo will focus exclusively on business aviation following completion of a deal it announced late Monday to sell its commercial aviation business to Intelsat for $400 million in cash. Proceeds from the deal will be used to shore up its net debt position and invest in new services in the “attractive and underpenetrated” business aviation market, including Gogo 5G, according to the Broomfield, Colorado-based company.

“This transaction creates a stronger and more focused Gogo, with the singular strategic imperative of serving the business aviation market with the best inflight connectivity and entertainment products in the world,” said Gogo president and CEO Oakleigh Thorne. “The BA market continues its sharp recovery and strong demand growth trajectory, and our BA segment is exceptionally well positioned to drive long-term value creation in that industry.”

Under the definitive agreement, Intelsat plans to finance the transaction with cash on hand and borrowing from its $1 billion debtor-in-possession credit facility. Intelsat, which filed for Chapter 11 bankruptcy reorganization in May, also has received approval to buy Gogo’s commercial aviation business from the U.S. Bankruptcy Court for the Eastern District of Virginia, Richmond division.

Gogo’s board of directors has approved the sale. It is expected to close before the end of the first quarter of 2021.