DataPath is on the verge of completing its acquisition of European mobile satellite terminal vendor Swe-Dish Satellite Systems with a deal likely to be announced later in the month, a Swe-Dish executive said on June 8.

Lars Jehrlander, CEO of Swe-Dish, confirmed to Satellite News that the company had already told employees about the deal and that a formal announcement would be forthcoming.

He added that Swe-Dish would continue to operate as a wholly owned but independent subsidiary.

Jehrlander said "the deal to be acquired by DataPath is imminent. However, the deal is not done yet, so we have not gone out with a press release. But we have told employees about the deal. We expect the deal to be finalized within one month."

DataPath spokesman Peter Herbert declined to comment other than to say when we complete an acquisition we will make an announcement."

Jehrlander believes the two companies have complementary product portfolios and that the link-up makes a lot of sense.

"We think it is a good combination," he said. "I think it is fair to say we are one of the world leaders in terms of mobile satellite terminals from 0.9 meters up to 1.5 meters. If you look at DataPath, they have their product portfolio starting at 1.8 – 2.4 meters and going up. It is a very good fit from a product point of view. We have got[ten] to know the DataPath people. They have got[ten] to know us. I think we have a good match of cultural and business values. I think both parties are looking forward to working together."

Origins of Deal

Jehrlander described the deal between the two parties as a result of negotiations begun in 2006 as the companies considered arranging a distribution deal.

"The deal started with discussions, which took place last autumn about a distribution agreement with DataPath concerning the U.S. market," he said. "The agreement saw DataPath distribute our terminals in the U.S. Those discussions then turned to both parties seeing the potential benefits of becoming one company. It quickly turned into a procurement process."

With the U.S. market being a key target market for Swe-Dish, and DataPath having more international aspirations, it seemed worthwhile for the two companies to join forces.

Jehrlander said "the combination will also give us a better foothold in the U.S. market. From a DataPath perspective, it is a good step in their ambitions of becoming a more international company. They are acquiring a 100 percent stake in us, but we will continue to be run as an independent subsidiary. There will be no major changes in how Swe-Dish is run."

He added "from a Swe-Dish perspective, this is a good deal because we can see consolidation going on in our market segment. Now we are joining a strong U.S. player, and the U.S. is one of our key markets. This is very positive. DataPath wants to help us continue to develop terminals and our product roadmap."

Strong Start

The move adds further momentum to what Jehrlander suggested has been a strong 2007 for Swe-Dish.

Jehrlander said the company was ahead of its own internal forecasts in terms of contracts, that it had been performing strongly in Europe, and that more announcements were being formulated.

He added "we are very positive about our prospects. The first six months have been very good for us. We have had significant breakthroughs in the European market, although I cannot mention which countries yet."

— Mark Holmes Contact: Sofi Westerblom Fernstrom, Swe-Dish Satellite Systems; e-mail: [email protected]