UniTek Global Services Inc. (UNTK: Quote) announced that its subsidiary, DirectSat USA, has agreed to acquire the assets of Skylink LTD. The transaction is expected to close on September 14, 2012.
For the year ended December 31, 2011, Skylink generated revenue of approximately $31.2 million, with EBITDA of $5.9 million. The company expects EBITDAof the acquired business to exceed $7.0 million per year after eliminating certain redundant costs in the combined operations.
The maximum total consideration under the agreement is $23.5 million, which includes $14.0 million in cash at closing and earn-out payments up to $9.5 million, subject to achievement of certain performance milestones. The earn-out payments are expected to be $3.5 million payable in December 2012 and up to $6.0 million payable no later than May 31, 2013, with a minimum payment at that date of $4.0 million.
UniTek said, to fund the initial payment, it has exercised its right to increase the amount of its existing term loan by $15 million.
The interest rate, maturity date and terms of the existing loan agreement did not change. The Company expects to fund the remaining earn-out payments mainly through operational cash flow generated by the acquired assets over the next twelve months. The acquisition is expected to be immediately de-levering while augmenting one of the Company's strongest performing businesses and improving EBITDA margins, net income and working capital profile.
Headquartered in Findlay, OH, Skylink was founded in 1998. Skylink specializes in fulfillment services including installations, upgrades and service calls for DirecTV and ViaSat. With a workforce including over 230 technicians, Skylink operates under a four-year agreement with DirecTV in the cities of Fort Wayne, Indiana, Beckley, Culloden and Buckhannon, West Virginia and Dayton, Findlay, Cambridge, Celina and Hilliard, Ohio.
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by RTT Staff Writer
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