France: Astrium, a subsidiary of the European Aeronautic Defence and Space Company (EADS), is “generally interested” in acquiring one of two satellite imagery providers, GeoEye Inc or DigitalGlobe Inc, and would look carefully at a deal if the price was affordable, according to Evert Dudok, Chief Executive of Astrium Satellites.
In conversation with Reuters, Dudok said the company’s parent, EADS was actively looking for takeover targets in the US, and either of the two companies would be a good fit with Astrium, which is ranked No. 3 — behind them — in the geospatial information market.
“We are generally interested, but we have to really see whether that makes any sense,” Dudok stressed. “Should such an occasion arise at a price that is affordable, one would certainly look at it.”
Dudok’s comments came after Sean O’Keefe, Chief Executive of EADS North America, underscored the company’s determination to boost up its US revenues through acquisitions, alliances or mergers, especially in the services and satellites sectors.
Dudok noted that Astrium last year acquired Vizada, a Paris-based satellite communications firm and was building a strong geo-information business that provides earth observation, radar and other data to customers around the world.
He said both GeoEye and DigitalGlobe did a great deal of work for the US government, which could make an acquisition by the European company more difficult, but he said an acquisition in that area would allow Astrium to streamline market approaches and combine databases for expanded commercial sales.
GeoEye and DigitalGlobe shares have come under pressure in recent weeks amid reports that the US government plans to halve or significantly scale back its expected procurement of USD 7.3 billion in digital imagery over the next decade. However, GeoEye Chief Executive Matthew O’Connell told an analyst call that the company had not been notified of any cuts to the US commercial imagery programme and that decisions were not expected from the National Geospatial Imagery Agency (NGA) until mid-April or early May. He said the company planned to launch its new GeoEye-2 high-resolution imagery satellite regardless of any cuts, and saw strong continued support for its programme in the US Congress.
He also said the company was “well on the way” to meeting a milestone on the new satellite that would trigger a cost share payment of USD 111 million, money that he said “should be insulated from the federal budget base.”
GeoEye last year had hired Goldman Sachs to find a buyer, attracting some private equity interest, but no deal resulted from the strategic review, according to sources familiar with the process. However, industry executives say the drop in the company’s share price could make it a more attractive target.