Abu Dhabi’s Bayanat AI PLC and Al Yah Satellite Communications Company (Yahsat) have jointly announced their intention to merge, and they have issued a circular calling for their General Assembly Meetings (GAMs) to be held simultaneously on 25 April, 2024. The shareholders of both companies will have the opportunity to vote on the proposed merger during these meetings.
Read more: Abu Dhabi’s Bayanat, Yahsat announce merger, creating global space tech powerhouse
The decision to merge was made following a unanimous recommendation by the respective Boards of Directors of Bayanat and Yahsat, which was announced on December 19, 2023. The merger aims to create a new entity called SPACE42, which will be a leading AI-powered space technology company in the MENA region. Upon completion of the merger, SPACE42 is expected to become one of the most valuable publicly listed space companies globally, with significant potential for further growth and synergies. Bayanat and Yahsat are projected to achieve a combined market capitalization of AED15 billion ($4.08 billion).
Strong financial position
Based on the financial results released for the 2023 Financial Year (FY), Bayanat and Yahsat have a combined revenue of AED2.8 billion ($762.44 million) and net income of AED637 million ($173.45 million). This strong financial position will enable SPACE42 to deliver substantial value to all stakeholders across various sectors, including upstream, midstream, and downstream solutions.
The merger will provide SPACE42 with greater scale, allowing for an expanded range of services and vertical integration opportunities. This will enable the company to offer a unique value proposition, benefit from economies of scale, and enhance profitability throughout the value chain.
By combining their strengths, the merged entity will be well-positioned to capitalize on evolving market dynamics and pursue regional and international opportunities in geospatial and mobility solutions, satellite communications, sustainability initiatives, and business intelligence.
Strengthening role as strategic solution provider
SPACE42 is expected to achieve significant cost and revenue synergies by cross-selling and up-selling existing solutions, leveraging customer relationships, expanding its distribution network, and accessing an enhanced technology platform with new products and solutions. This strategic combination will support continuous growth and strengthen SPACE42’s role as a leading provider of strategic solutions to the UAE government, as well as expand its global customer base.
The enlarged entity will also benefit from a high level of revenue and cash flow visibility, primarily through government-related contracts. This predictable and secure cash flow, along with a strengthened financial position, will be supported by a balanced financial framework that prioritizes investment for profitable growth and the return of capital to shareholders.
The completion of the merger is subject to various conditions, including regulatory approvals from governmental authorities such as the Securities and Commodities Authority, the ADGM Registration Authority, and international regulatory authorities. Additionally, the merger requires approval from shareholders representing 75 percent of the voting rights in each company, which will be obtained during the General Assembly Meetings.
Until the merger becomes effective, both Bayanat and Yahsat will continue to operate as independent entities.
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