Canada's MacDonald Dettwiler to buy satellite imagery firm DigitalGlobe

Fri Feb 24, 2017 12:47pm EST
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By Aishwarya Venugopal

(Reuters) - Canada's MacDonald Dettwiler and Associates Ltd (MDA.TO: Quote) said it would buy U.S.-based satellite imagery provider DigitalGlobe Inc (DGI.N: Quote) for about C$3.10 billion ($2.40 billion), the biggest deal yet in a fast-consolidating earth-imaging satellite market.

DigitalGlobe's satellites supply high-resolution images to its customers such as the U.S. Department of Defense and companies including Facebook Inc (FB.O: Quote) and Uber Technologies Inc [UBER.UL].

MDA, which manages satellites for surveillance, direct-to-home television, satellite radio and mobile communications, said DigitalGlobe shareholders will get $17.50 in cash and 0.3132 of its shares for each share held.

MDA said the offer translates to $35 per share based on its stock's closing pricing on Feb. 16, before reports of a potential deal emerged. The offer represents a premium of 2.8 percent to DigitalGlobe's Thursday close of $34.05.

Shares of DigitalGlobe were trading down 7.5 percent at $31.50 on Friday, while MDA's shares were down 4.2 percent at C$64.77.

Investors had expected a premium from the stock's Thursday close and not a premium based on the stock's close before reports of a potential deal, Ashwini Birla of Dougherty & Co LLC said.

"I am guessing DigitalGlobe investors are exiting gracefully."

The deal includes assumption of DigitalGlobe's debt of C$1.60 billion and is expected to close in the second half of 2017.   Continued...