We carried out commercial due diligence on a satellite operator in the Middle East, on behalf of Hispasat, a Spanish satellite operator with high growth ambitions

The problem

• Hispasat, a Spanish satellite operator with strong operations in Latin America, was looking at inorganic growth opportunities and new market entry through the acquisition of a smaller player with operations in both Latin America and EMEA
• The client did not feel comfortable entering a new market without fully understanding its dynamics, and so engaged Analysys Mason to evaluate the attractiveness of the asset’s EMEA operations and assess the risks associated with its acquisition, with a particular focus on market dynamics

The solution

• To tackle Hispasat’s concerns related to new market entry we conducted thorough market research and analysis for the 15 most relevant EMEA countries. For each country we analysed:
  • the development of its economy and business environment to assess potential B2B demand for satellite capacity
  • the status of telecoms infrastructure and government initiatives for any future developments, to address risks/opportunities for satellite services
  • the level of competition in the EMEA satellite market
• To help Hispasat quantify the risks associated with a potential investment we conducted two main analyses
  • a review and summary of contractual terms with existing EMEA customers to reassure the client on the secured revenue base it was acquiring
  • a pipeline assessment to quantify very likely opportunities, which concluded that the business plan revenue forecast was aligned with the target’s current sales efforts

Figure: Summary of analysis on contractual expiry date

The result

• We concluded that the target’s expected EMEA growth was reasonable based on historical performance and 2021 actuals and that there were more opportunities than risks associated with Hispasat entering the EMEA market. The client accepted our recommendation and acquired the target, increasing its growth prospects and becoming a key satellite player across Europe, Latin America and EMEA