"With a stronger financial profile, more robust suite of services, and among the world's most advanced geospatial production and analysis capabilities, we will be even better positioned to meet customers' needs and create value for shareowners," said Jeffrey R. Tarr, President and Chief Executive Officer of DigitalGlobe. "Together, we are poised to achieve our vision of being the leading source of information about our changing planet."
As a result of the combination, DigitalGlobe is now uniquely positioned to provide a wider array of earth imagery and geospatial analysis to help customers solve their most complex problems and compete in a high-growth and dynamic global market. Together, the combined company will have:
An expanded global presence with a larger and more diverse revenue base;
A larger constellation with optimized orbits, coordinated scheduling and improved revisit rates;
Better integrated imagery collection, processing and analytics capabilities; and
A strengthened balance sheet and financial profile with more than an expected $1.5 billion in net present value of operating expense and capital synergies, with approximately one-third of those synergy savings related to operating expense and the balance from capital savings.
Mr. Tarr continued, "We have a deep bench of talented and experienced team members from both GeoEye and DigitalGlobe, and I am confident that, together, we will continue to raise the bar for innovation and service in our industry. I look forward to working closely with our Board of Directors, our leadership and all of our team members to ensure a seamless transition for our customers worldwide."
In connection with the combination with GeoEye, DigitalGlobe has entered into new senior secured credit facilities in the aggregate amount of $700 million. The facilities consist of a term loan facility of $550 million and a revolving credit facility of $150 million. The Company has borrowed the full amount of the term loan facility to fund the combination with GeoEye and to refinance certain existing indebtedness of GeoEye and DigitalGlobe. The revolving credit facility remains undrawn at closing.
Borrowings under the term loan facility will bear interest at an amount equal to the adjusted LIBOR rate plus 2.75%, with a step-down to the adjusted LIBOR rate plus 2.50% if the Company's leverage ratio is equal to or less than 2.50:1.00. The credit agreement contains affirmative and negative covenants that the Company believes are usual and customary for a senior secured credit agreement. The credit agreement also requires the Company to maintain a maximum leverage ratio and a minimum interest coverage ratio.
Also in connection with the combination, GeoEye, discharged and called for redemption all of GeoEye's 75 outstanding 9.625% Senior Secured Notes due 2015 and 8.625% Senior Secured Notes due 2016.
DigitalGlobe expects to announce fourth quarter 2012 and full year 2012 earnings on February 26, 2013, and intends to provide full-year 2013 financial guidance at that time.
DigitalGlobe is a leading provider of commercial high-resolution earth observation and advanced geospatial solutions that help decision makers better understand our changing planet in order to save lives, resources and time. Sourced from the world's leading constellation, our imagery solutions deliver unmatched coverage and capacity to meet our customers' most demanding mission requirements. Each day customers in defense and intelligence, public safety, civil agencies, map making and analysis, environmental monitoring, oil and gas exploration, infrastructure management, navigation technology, and providers of location-based services depend on DigitalGlobe data, information, technology and expertise to gain actionable insight.
In January 2013, DigitalGlobe and GeoEye combined to become one DigitalGlobe, creating a company capable of providing greater value to customers through an integrated constellation and a broader set of products and services. For more information on the combination and its benefits, visit www.digitalglobe.com/combination.
DigitalGlobe is a registered trademark of DigitalGlobe.