Israel-based RRsat Global Communications Network has announced that it has entered into an agreement to acquire the satellite business of Bezeq, the Israel Telecommunications Corporation, Israel’s leading telecommunications service provider, for approximately US$15million in cash. The acquisition is expected to close in the third quarter of 2008 and is subject to various approvals, including regulatory approvals and other closing conditions.
RRsat will acquire the property and assets of Bezeqs Emek Ha’ela Teleport in Israel, which includes approximately 26.5 acres, as well as Bezeq’s BezeqSat and 711 business units. The BezeqSat unit is Bezeq’s distribution centre and provides services to TV and radio channels such as BBC, CNN and many others. The 711 unit provides global satellite communication services, and serves as a primary distribution centre for Inmarsat, a global provider of satellite services. As part of the transaction, RRsat will assume Bezeqs existing satellite business and customer contracts, which accounted for revenues of approximately US$7million in 2007.
“We are extremely pleased to have signed this agreement to acquire the satellite and content distribution business from Israel’s largest telecommunications service provider,” commented David Rivel, Founder and CEO of RRsat. “The landmark Emek Haela teleport has operated as one of the premier communications facilities in Israel for more than 30 years and is currently one of the most interconnected fibre network hubs in the country. The facility was designed to support video, radio and data content, and will allow us to significantly increase the capacity and redundancy of our infrastructure. In addition to the immediate contribution to our revenues following the closing, this acquisition will serve as a platform to strengthen our service offerings to our existing customers as well as cross-sell our services to BezeqSat’s customers.
Mr. Rivel concluded, “We believe the proposed acquisition will enhance our position as a major content management and global distribution company, and further expand the footprint of our proprietary RRsat Global Network. We also intend to continue to explore additional complementary acquisitions that will grow our customer base and expand our service offerings.”