Gogo shares soar 31% premarket on news to sell commercial aviation business to Intelsat for $400 million

/ / News

Gogo Inc. shares soared 31% in premarket trade Tuesday, after the in-flight wireless internet provider said it’s selling it’s commercial aviation business to Intelsat SA for $400 million in cash. The Gogo board has approved the deal, which is expected to close before the end of the first quarter of 2021. Intelsat will fund the deal with cash on hand and borrowings under a $1 billion debtor-in-possession credit facility, with approval from the U.S. Bankruptcy Court for the Eastern District of Virginia, Richmond Division. “Combining CA, the leading in-flight connectivity provider, with Intelsat, the world’s largest global satellite operator, will create the leading vertically-integrated IFC business in the world, with the additional resources and scale to support continued growth and innovation as demand for commercial air travel recovers,” Gogo Chief Executive Oakleigh Thorne said in a statement. Gogo will use the proceeds of the deal to pay down debt and invest in growth opportunities, including its Gogo 5G products. Gogo shares have fallen 19% in the year through Monday, while the S&P 500 has gained 8%.

Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.