The British satellite communications company Inmarsat has agreed to a $3.4bn (£2.6bn) takeover by a group led by the private equity firms Apax and Warburg Pincus, becoming the latest UK technology business to be sold to investment companies.
A consortium made up of London-based Apax, New York-based Warburg and two Canadian pension funds, the Canada Pension Plan Investment Board and the Ontario Teachers’ Pension Plan Board, is to buy the FTSE 250 company for $7.21 a share in cash.
The investor group said it would keep Inmarsat’s headquarters in the UK and maintain the company’s spending on research and development. Inmarsat employs 800 people at its base at Old Street roundabout in London, out of a 2,000-strong global workforce.
The agreed deal comes nine months after Inmarsat rejected an offer from its US rival EchoStar and reignites concerns over takeovers of leading UK technology businesses following Melrose’s controversial £8bn acquisition of the engineering company GKN and the £24bn takeover of smartphone chipmaker ARM Holdings by Japan’s SoftBank.
Inmarsat, which has 13 satellites in orbit, provides mobile satellite services that underpin email, internet and video conferencing, as well as in-flight wifi. It supplied satellite services to the Ministry of Defence to improve ground communications for soldiers fighting in Afghanistan.
Its “groundbreaking” technology was also used in the hunt for the missing Malaysia Airlines flight MH370 in 2014, narrowing the corridor of the Indian Ocean in which accident investigators hunted for the plane.
The company was set up in 1979 by the International Maritime Organization, the UN’s maritime body, as an international governmental organisation to enable ships to communicate with shore and to call for help in emergencies. It was privatised in 1999 and floated on the London Stock Exchange in 2005.
Inmarsat still provides communication services for ships and the consortium pledged to ensure that the company would fulfil its obligations under the global maritime distress and safety system.
It has struggled in recent years, however, and faces increasing competition from rivals including Elon Musk’s SpaceX and the Richard Branson-backed OneWeb, which last month launched its first six satellites into space.
Inmarsat’s shares rose nearly 9% to 550p on Monday.
Helal Miah, an investment research analyst at the Share Centre, said: “As one of the few large technology groups left in the UK and one that is of strategic and security importance, the government has previously mentioned that these businesses could be protected from overseas takeovers.
“This became an issue when ARM Holdings was taken over immediately after the EU referendum in 2016. But, given how distracted we are with Brexit, could we actually be losing control of key companies rather than ‘taking back control?’”
A spokesperson for the Department for Business, Energy and Industrial Strategy said: “This is a commercial matter but we are monitoring this takeover bid.”
The government has powers to intervene in takeovers but can only do so in strictly limited sets of circumstances, including as to whether a deal might affect financial stability, reduce media plurality, or have defence and national security implications.
When the turnaround specialist Melrose bought the defence contractor GKN in an £8bn deal last year, the Labour MP Jack Dromey called on the government to block the deal but the business minister, Greg Clark, decided against any intervention.
