Viasat sells its Link 16 tactical data link business to L3Harris Technologies for $1.96 billion

About 35% of government system sector revenue

Carlsbad, California, October 32022 /PRNewswire/ — Viasat Inc. (NASDAQ: VSAT), a global leader in satellite communications, today announced that it has entered into a definitive agreement to sell its Link 16 tactical data link (TDL) business to L3Harris Technologies $1.96 billion, making customary trading adjustments in accordance with the agreement.The sale is expected to provide Viasat with cash proceeds of approximately $1.8 billion Only after estimated taxes, fees and other charges.

Viasat’s Link 16 tactical data link business is part of its Government Systems division. Over the past 25 years, the business has grown into a leading supplier of Link 16 TDL products and solutions. Businesses for sale include the Multifunction Information Distribution System (MIDS) platform and associated next-generation Link 16 terminals and handheld radios, as well as the Link 16 to space business.

“This transaction will transform our balance sheet, reduce our cash interest obligation, and strengthen our strategic focus, while providing continued growth opportunities for the Link 16 business and ensuring our customers are competitive, innovative and competitive for their future needs. A reliable source. Link 16 Tactical Data The Links business has been a significant contributor to Viasat’s growth and earnings, and this transaction recognizes the value created by our talented team. L3Harris has been a long-term strategic partner of Link 16 and its product portfolio will benefit from these capabilities Going forward, both the ViaSat-3 constellation and the acquisition of Inmarsat create greater forward-looking government systems growth opportunities for the space business with additional R&D, capital and operational synergies,” Mark DankerbergCEO and Chairman of the Board, Viasat.

“The acquisition of Viasat’s TDL product line will enhance our existing capabilities as a leading provider of resilient network solutions,” said Christopher E. Kubasque, CEO and Chairman of L3Harris. “Global national security needs in this area are rapidly increasing, and now we will be able to advance JADC2 and expand our versatile, multi-domain mission solutions through the integration with Link 16.”

The Link 16 TDL business has approximately $400 million Income and estimates $125 million or Adjusted EBITDA as of 12 months June 30, 2022the latter being covered by an estimated amount of distributable overhead and company expenses approximately one year after the expected closure.

Viasat intends to use the proceeds from the sale of Link 16 TDL to reduce net leverage and increase liquidity. Pro forma of Link 16 TDL sales, standalone net leverage to date June 30, 2022 It will decrease from 4.2 times LTM Adjusted EBITDA to approximately 1.4 times. In addition, upon completion of the Inmarsat acquisition, the sale proceeds are expected to reduce Viasat and Inmarsat’s combined net leverage by approximately 0.7 laps. June 302023. Viasat expects the earnings to fully fund a path to positive free cash flow, including the proposed Inmarsat transaction, with lower leverage and cash interest.

After a formal impact on Link 16 TDL sales, Viasat’s Government Systems division will generate approximately $700 million Annual income as of 12 months June 30, 2022. Going forward, the division will focus on three core areas: broadband and narrowband satellite communication services, networks and technologies; information assurance and cybersecurity; and an emerging portfolio of space-based services, including for a range of Earth observation and sensor systems, LEO-to-GEO relays and networks for Alternate Position, Navigation and Timing (PNT) and Space Situational Awareness.

The Inmarsat transaction continues as expected. Both deals will better support Viasat’s transformation to capture a larger percentage of revenue from its service-based recurring model. For the pro forma of the Link 16 TDL sale and the Inmarsat acquisition, Viasat expects recurring service revenue to increase to approximately 77% of total revenue.

The sale of Link 16 TDL is expected to close in the first half of 2023, subject to regulatory approvals and customary closing conditions. Viasat received approval to sell Link 16 TDL from Inmarsat’s equity sponsor.

JP Morgan Securities LLC acted as lead financial advisor and PJT Partners acted as financial advisor to Viasat. Latham & Watkins LLP acted as legal counsel to Viasat.

forward-looking statements
This press release contains forward-looking statements regarding future events and our future results that are subject to the safe harbors of the Securities Act of 1933 and the Securities Exchange Act of 1934. Forward-looking statements include, among other things, statements concerning the proposed divestiture of our Link 16 Tactical Data Links business to L3Harris (herein referred to as the “Link 16 TDL Sale”) and regarding expected timing, costs and benefits and regulatory and other closing conditions the timing or fulfillment of any statement; the pending acquisition of Inmarsat (together with the Link 16 TDL sale, the “Transaction”) and expected operations, financial condition, liquidity, performance, prospects or growth opportunities following the closing of the transaction; our ViaSat-3 rating the performance and expected benefits of the satellites and any future satellites we may build or acquire; the expected completion, capacity, service, coverage, useful life and other characteristics of our satellites, and the time, cost, economic and other benefits associated therewith ; forecasts of earnings, revenues, costs or other financial items for fiscal 2023 and beyond; expected growth and trends in our business or key markets; future economic conditions and performance; technology, product or service developments, customer acceptance and expected performance; expected growth opportunities for our business segments; construction and launch of our ViaSat-3 constellation; plans, objectives and strategies for future operations; and other descriptions of future events or circumstances are forward-looking statements. Readers are cautioned that these forward-looking statements are only predictions and are subject to risks, uncertainties and assumptions that are difficult to predict. Factors that could cause actual results to differ materially include: the risks and uncertainties associated with the transaction, including the failure or delay in obtaining regulatory approvals or licenses required for any transaction; the risk of conditions that adversely affect the expected benefits of the transaction; the failure to meet any closing conditions of the transaction in a timely manner or at all; the occurrence of any event, change or other circumstance that could lead to the termination of the definitive agreement for any transaction; the ability to realize the expected benefits of the transaction ; our ability to successfully integrate Inmarsat operations, technology and employees; our ability to realize the expected benefits of the ViaSat-3-class satellite and any future satellites we may build or acquire; contingency costs associated with our satellite programs; our successful implementation based on the capabilities of the business model of the service; the capabilities of our business prior to the launch of the service on our ViaSat-3 satellite; the risks associated with the construction, launch and operation of the satellite, including the impact of any anomalies, operational failures or degradation of satellite performance; The impact of the COVID-19 pandemic on our business, suppliers, consumers, customers and employees, or the overall economy; our ability to successfully develop, introduce and sell new technologies, products and services; U.S. government audits; the global business environment and Changes in economic conditions; delays in approving the U.S. government budget and cuts in government defense spending; our reliance on U.S. government contracts, and a small number of contracts that represent a significant percentage of our revenue; reduced demand for products and services due to continued customer constraints on capital spending; Changes in relationships or financial conditions with key customers or suppliers; our reliance on a limited number of third parties to manufacture and supply our products; increased competition; introduction of new technologies and other factors affecting the communications and defense industries as a whole; adverse regulatory changes (including changes that affect spectrum availability or permitted use) on our ability to sell or deploy our products and services; changes in how others use spectrum; our inability to acquire additional spectrum, use spectrum for additional purposes and/or or operating satellites at additional orbital locations; competing uses of the same spectrum or orbital locations that we utilize or seek to utilize; the impact of recent changes in U.S. tax law; our debt levels and ability to comply with applicable debt covenants; our involvement in litigation, including intellectual property claims and lawsuits to protect our know-how; and our reliance on a limited number of key employees. In addition, please see the risk factors contained in our filings with the SEC at, including our most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Readers are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date they are made. We undertake no obligation to revise or update any forward-looking statement for any reason.

This press release includes independent financial information of Viasat and pro forma information affecting Link 16 TDL sales for the period shown and certain pro forma consolidated financial information affecting Link 16 TDL sales and consolidation of Inmarsat’s financials for the period shown information. The pro forma and pro forma consolidated financial information is for illustrative purposes only and does not necessarily indicate what actual financial position or results of operations would have been if the applicable transaction had been completed on the first day of the period shown and does not include requirements for pro forma purposes in accordance with U.S. GAAP All pro forma adjustments.

About Viasat
Viasat is a global communications company that believes everyone and everything in the world can be connected. For over 35 years, Viasat Helped shape how consumers, businesses, governments and militaries communicate around the world. Today, companies are developing the ultimate global communications network to deliver high-quality, secure, affordable, and fast connections that impact people’s lives anywhere—on the ground, in the air, or at sea.Learn more about Viasatvisit: www.viasat.comgo Viasat’s corporate blogor follow the company on social media: Facebook, Instagram, LinkedIn, Twitter or YouTube.

Copyright © 2022 Viasat, Inc. All rights reserved. Viasat, the Viasat logo and the Viasat signal are registered trademarks of Viasat, Inc. All other product or company names mentioned are for identification purposes only and may be the trademarks of their respective owners.

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