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Intelsat Sees Q2 Revenue Bump

PanAmSat Acquisition Boosts Total; BC Partners Deal Expected to Close by Q1 ‘08 8/09/2007 01:01:00 AM Eastern

Satellite operator Intelsat posted record quarterly revenues of $543 million for the second quarter of 2007 as it prepares to sell a controlling stake to private-equity firm BC Partners.

Bermuda-based Intelsat attributed the revenue bump to the impact from its July 2006 acquisition of competitor PanAmSat, which significantly shifted the company’s revenue mix in favor of media customers (from 17% to 37% of overall revenues). The company still posted a second-quarter loss of $31.7 million, which it attributed mostly to interest expenses relating to the PanAmSat acquisition.

The deal with BC Partners is moving forward, with a close expected in the fourth quarter of 2007 or first quarter of 2008. Under the deal -- which placed an enterprise value on Intelsat of $16.4 billion -- current shareholders of Intelsat Holdings are expected to receive approximately $4.6 billion in cash and approximately 27% of the fully diluted equity of the new company.

On its earnings call Thursday, Intelsat announced that BC Partners identified another investor that is joining the deal and that will buy a stake of 10% or more in the new company. That could leave the current shareholders -- which include a collection of private-equity firms and management -- with a stake of 5% or less in the new Intelsat.

While BC Partners has not formally named the new investor, the firm informed Intelsat that it received equity commitments in the amount of $1.1 billion in cash, in addition to previously announced debt-financing commitments of roughly $5.11 billion from several investment banks. BC Partners is expected to unveil the new equity investor shortly through a required Securities and Exchange Commission filing.

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