Globalstar To Merge With Metro Fiber Provider FiberLight And Buy Other Assets

(RTTNews) - Globalstar Inc. (GSAT) said that it has signed a merger agreement with Thermo Acquisitions, Inc. by which the following assets will be combined with Globalstar: metro fiber provider FiberLight, LLC, 15.5 million shares of common stock of CenturyLink, Inc. (CTL) , $100 million of cash and minority investments in complementary businesses and assets of $25 million in exchange for Globalstar common stock valued at approximately $1.65 billion, subject to adjustments.

Thermo Acquisition, Inc. is controlled by Jay Monroe, Executive Chairman of the Board of Directors and Chief Executive Officer of Globalstar. At closing the parent company will be renamed Thermo Companies Inc., and its stock will continue to trade publicly.

The transaction has been unanimously recommended by the Special Committee of the Board of Directors of Globalstar, consisting entirely of independent directors, and unanimously approved by the full Board of Directors. The merger is expected to close in the third quarter of 2018.

Looking forward to the full year 2019, the company expects Adjusted EBITDA of the combined entity to be in excess of $165 million and combined net debt2 at December 31, 2019 of less than $200 million.

Upon completion of the merger, Thermo Companies expects to initiate a rights offering of up to $100 million for minority shareholders. The rights offering would be consummated approximately 45 days following closing, is expected to be available to holders of record on the date of closing and will include an over-subscription privilege allowing for the subscription of additional shares with allotments otherwise on a pro rata basis.

As a result of the merger, Globalstar Chairman and Chief Executive officer Jay Monroe will increase his beneficial ownership in the pro forma company from a fully diluted ownership of approximately 58% today to between 83% and 87% at closing. The final ownership level is variable based on the 20-day volume weighted average share price upon close.