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Viasat (VSAT) to Boost Connectivity Suite With RigNet Buyout

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Viasat, Inc. (VSAT - Free Report) has inked a deal to acquire RigNet, Inc. in an all-stock transaction valued at $222 million. Headquartered in Houston, TX, RigNet is a leading provider of networking solutions and specialized applications. It delivers advanced software and communications infrastructure that allows business customers to realize the benefits of digital transformation.

The purchase price, which includes RigNet’s net debt as of Sep 30, 2020, is based on the closing price of Viasat’s stock as of Dec 18, 2020. Per the deal, RigNet’s shareholders will receive a fixed exchange ratio of 0.1845 shares of Viasat per RigNet share.

The acquisition creates a vertically integrated communications company. It will serve customers in industries like airlines, residential and energy by providing leading-edge connectivity from the satellite to the end customer.  The combined firm will boost RigNet’s industry-leading AI-backed machine learning business, Intelie.

Viasat is a leading global innovator in satellite technology and service delivery. The company continues to make progress on its ViaSat-3 global constellation amid challenges posed by the pandemic. Of late, the Satellite Services segment is benefiting from increased subscriber demand for broadband with substantial growth in video streaming.

The transaction, subject to regulatory approvals, is expected to be closed by the middle of 2021. It is to be seen if Viasat can achieve accretive synergies from this acquisition that go beyond cost savings.

Viasat’s shares have lost 20.4% in the past six months against 40.7% growth of the industry. The company has a long-term (three to five years) earnings growth expectation of 19% compared with the industry’s 13.8%. It delivered a trailing four-quarter positive earnings surprise of 365.9%, on average.



The stock carries a Zacks Rank #3 (Hold), at present.

Some better-ranked stocks in the broader industry are Plantronics (PLT - Free Report) , United States Cellular (USM - Free Report) and NIC (EGOV - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Plantronics delivered a trailing four-quarter positive earnings surprise of 568.2%, on average.

U.S. Cellular delivered a trailing four-quarter positive earnings surprise of 231.1%, on average.

NIC delivered a trailing four-quarter positive earnings surprise of 27.5%, on average. The company’s earnings beat the Zacks Consensus Estimate in two of the last four quarters.

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