Gogo has made a strategic acquisition of Satcom Direct for $375 million in cash and five million shares to strengthen its position in the inflight connectivity sector.
Gogo has historically dominated the small and midsize segments of the business aviation market, while Satcom Direct has a strong presence in the long-haul segment. Together, the two companies are estimated to provide Wi-Fi services to nearly 90% of the market.
This move comes as Gogo faces increasing competition from SpaceX's Starlink. Starlink has gained significant partnerships in the aviation sector, including with Air France. Gogo's stock has dropped approximately 70% since Starlink's expansion.
Gogo and Satcom Direct currently use a combination of air-to-ground networks and geostationary orbit satellite capacity for Wi-Fi services. Both companies are preparing to enhance their offerings through a partnership with Eutelsat's OneWeb LEO constellation.
The acquisition of Satcom Direct will expand Gogo's market reach, particularly in the international business aviation sector. Gogo aims to offer its Galileo LEO solution in conjunction with Satcom Direct's services. The deal also allows Gogo to upsell its Galileo LEO services to Satcom Direct's existing customer base.
The acquisition strengthens Gogo's position in the market, especially as competitors like SmartSky struggle. The integration of Gogo and Satcom Direct's services could redefine connectivity standards in business aviation.