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Four Firms Buy Intelsat

Satellite Company Finishing Move Away From Government

By Yuki Noguchi
Washington Post Staff Writer
Tuesday, August 17, 2004; Page E01

Intelsat Ltd., the pioneering commercial satellite company that connected the world through global television and telephone communications, announced yesterday its sale to a group of private investors for $3 billion in cash.

The deal, announced yesterday morning in Bermuda, would mark the completion of Intelsat's transformation to a private company. For most of its 40 years, it has been owned and governed by companies representing 145 governments around the world.


Scenes from the 1969 Apollo 11 moon landing were transmitted around the world by Intelsat satellites. (NASA--Reuters)

_____Correction_____
An Aug. 17 Business article incorrectly recounted the history of commercial satellites. Congress created Comsat in 1962 to participate in the development of a global satellite system; Intelsat was founded in 1964 as an international satellite organization.


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Intelsat to Be Acquired by Consortium of Private Investors (Aug 16, 2004)
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Video: Intelsat Ltd., the pioneering commercial satellite company that connected the world through global television and telephone communications, announced Monday its sale to a group of private investors for $3 billion in cash. The Post's Yuki Noguchi discusses the deal.
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Intelsat Ltd.
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Intelsat Agrees to Be Acquired for $3B (Associated Press, Aug 16, 2004)
Intelsat IPO Delayed for a Third Time (The Washington Post, May 22, 2004)
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If the deal wins regulatory and shareholder approval, Intelsat will be owned by a conglomerate of four private-equity groups: Apax Partners Inc., Apollo Management LP, Madison Dearborn Partners and Permira Advisers Ltd. In addition to the $3 billion in cash, the buyers are assuming $2 billion in debt.

Intelsat -- best known for transmitting the world's first satellite phone call and for carrying live international television broadcasts of the Olympics -- is incorporated in Bermuda. But the bulk of its corporate operations are run out of its large mirrored-glass building in Northwest Washington, where most of its 900 employees work.

For years, Intelsat's presence in the Washington area helped foster a local satellite industry, starting with Comsat Corp., the company set up to manage the U.S. stake in Intelsat from its inception, and including Hughes Network Systems Inc. and XM Satellite Radio Holdings Inc.

Intelsat executives and its buyers said yesterday that Intelsat will maintain and perhaps expand its presence in the Washington area.

"Washington, D.C., is an ideal locus because of its many international connections as well as corporate sites," said James N. Perry Jr., managing director of Madison Dearborn. "It's a great corporate gem."

The new investors are looking to expand Intelsat's video broadcast and Internet access businesses, Perry said. Intelsat's original business selling telecommunications links across continents and oceans has suffered in recent years because of much cheaper competition from fiber-optic cables, but there are still growth opportunities in remote areas of the world not yet connected through fiber optics, he said.

Madison Dearborn had its eyes on the company for more than a year, Perry said, adding that Intelsat's fleet of 28 young and healthy satellites can sustain at least a decade of growth. He said Intelsat also is a good vehicle to use in consolidation of the industry, making for bigger players with broader reach and more resources.


Intelsat has an unusual corporate history. It was formed in 1964 by Congress, which then assigned its control to various government bodies. Its initial role was to provide telecommunications service to countries that lacked infrastructure for transmitting international phone calls.


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