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Justin Hibbard
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August 29, 2005

Panamset investors make out well

Steve Rosenbush

Intelsat said today it would buy rival satellite operator PanAmSat for $3.2 billion in cash.
The deal reflects private equity’s intense interest in the sector. A group of private equity companies including Kohlberg, Kravis Roberts; Carlyle Group and Providence Equity Partners bought Panamsat from News Corp. last year for $2.6 billion. Intelsat was purchased this year by Apax Partners, Apollo Management, MDP Global and Permira Advisors.

The Pansamsat investors have made out well. The industry was beaten down after the stock market crash of 2000. Now many companies have restructured and are focused on improving their margins and operations. Panamsat CEO Joe Wright, a former director of the Office of Management and Budget under President Reagan, has raised operating margins 66% to 75% since he took over in 2001. They have earned $600 million since they bought the company last year. And they raised millions earlier this year by selling 42% of the company to the public in an IPO. Intelsat paid a 40% premium to the IPO price that was set just six months ago. That’s a huge return at a time when the stock market is nearly flat.

04:53 PM

M&A

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