Private equity co pays €402.8m for Iridium

Iridium Holdings, a satellite phone company with a tangled history and 300,000 subscribers, is being acquired by an affiliate of private equity firm Greenhill & Co. for €402.8 million (US$591 million), an Associated Press report said.

GHL Acquisition said the deal includes €68.1 million (US$100 million) in cash, €52.5 million (US$77 million) from GHL and the rest from Greenhill. In addition, Iridium shareholders will get €245 million (US$360 million) in GHL shares.

The total value of the deal also includes €89.2 million (US$131 million) of debt Iridium held as of June 30, the Associated Press report also said.

US-based Iridium said the transaction will allow it to be debt-free and in a good position to replace its fleet of 66 satellites.

The transaction is subject to regulatory approvals and is expected to close in early 2009, the report added.

The combined company, to be 55% owned by GHL, would be renamed Iridium Communications Inc. and apply to go public on the Nasdaq.

GHL senior vice president Robert H. Niehaus would serve as chairman, but Iridium's existing management team, including CEO Matt Desch, are to stay in place.

Iridium, in a prior incarnation, launched its 'anywhere' mobile phone service a decade ago. But it signed up just a fraction of the subscribers that were stipulated when it secured its loans, and in 1999 Iridium filed for bankruptcy protection. The company had just 55,000 subscribers by the time it halted commercial service in 2000.