[Infowarrior] - DigitalGlobe to buy GeoEye for $453 million

[Richard Forno]

DigitalGlobe to buy GeoEye for $453 million

Mon Jul 23, 2012 8:16am EDT

http://www.reuters.com/article/2012/07/23/us-geoeye-offer-idUSBRE86M0FX20120723

(Reuters) - Satellite imagery provider DigitalGlobe Inc (DGI.N) said it will buy rival GeoEye Inc (GEOY.O) in a $453 million deal that would create the world's largest fleet of high-resolution commercial imagery satellites.

The companies, which are the only two suppliers of commercial satellite imagery to U.S. spy and military agencies, are set to join forces ahead of drastic cuts expected in the U.S. defense budget.

The cash-and-stock offer is 34 percent higher than GeoEye's stock's Friday closing price of $15.17 per share, the companies said.

DigitalGlobe shares were up 16 percent at $16.50, while those of GeoEye were up 37 percent at $20.74 in premarket trade on Monday.

DigitalGlobe CEO Jeffrey Tarr will head the new company, while GeoEye CEO Matt O'Connell will have an advisory role.

Tarr said the new company would be "better positioned to thrive in a time of unprecedented pressure on our nation's defense budget."

GeoEye stockholders can opt for 1.137 shares of DigitalGlobe stock and $4.10 per share in cash or 100 percent of the consideration in cash at $20.27 per share. They can also choose 100 percent of the consideration in stock at 1.425 shares of DigitalGlobe stock.

GeoEye shareholders are expected to own 36 percent of the new company under the deal, which caps the cash portion of the offer.

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