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Logo of Astrium space division is seen at the European aerospace and defence group EADS headquarters in Les Mureaux near Paris January 12, 2011.
Credit: Reuters/Charles Platiau
By Andrea Shalal-Esa
Tue Mar 13, 2012 8:35pm EDT
WASHINGTON (Reuters) - Europe's leading space company, Astrium, is "generally interested" in acquiring one of two U.S. digital imagery providers, GeoEye Inc (GEOY.O) or DigitalGlobe Inc (DGI.N), and would look carefully at a deal if the price was affordable, a top Astrium executive told Reuters on Tuesday.
Evert Dudok, chief executive of Astrium Satellites, said the company's parent, Europe's EADS (EAD.PA), was actively looking for takeover targets in the United States, and either of the two companies would be a good fit with Astrium, which is ranked No. 3 -- behind them -- in the geospatial information market.
"We are generally interested, but we have to really see whether that makes any sense," Dudok told Reuters after a panel at the Satellite 2012 conference. "Should such an occasion arise at a price that is affordable, one would certainly look at it."
Dudok's comments came after Sean O'Keefe, chief executive of EADS North America, underscored the company's determination to pump up its U.S. revenues through acquisitions, alliances or mergers, especially in the services and satellites sectors.
Dudok noted that Astrium last year acquired Vizada, a Paris-based satellite communications firm, and was building a strong geo-information business that provides earth observation, radar and other data to customers around the world.
He said both GeoEye and DigitalGlobe did a great deal of work for the U.S. government, which could make an acquisition by the European company more difficult, but he said an acquisition in that area would allow Astrium to streamline market approaches and combine databases for expanded commercial sales.
GeoEye and DigitalGlobe shares have come under pressure in recent weeks amid reports that the U.S. government plans to halve or significantly scale back its expected procurement of $7.3 billion in digital imagery over the next decade.
GeoEye shares closed up $2.54, or 13 percent, at $22.34 on the Nasdaq Stock Exchange on Tuesday after a conference call with top executives on the company's 2011 earnings.
That is up from a year low of $17.98, but still well below a 52-week high of $42.38.
DigitalGlobe closed 40 cents or 3.15 percent higher at $13.09 on the New York Stock Exchange, well below its 52-week high of $30.57.
GeoEye Chief Executive Matthew O'Connell told an analyst call on Tuesday that the company had not been notified of any cuts to the U.S. commercial imagery program, and that decisions were not expected from the National Geospatial Imagery Agency until mid-April or early May.
He said the company planned to launch its new GeoEye-2 high-resolution imagery satellite regardless of any cuts, and saw strong continued support for its programs in Congress.
He also said the company was "well on the way" to meeting a milestone on the new satellite that would trigger a cost share payment of $111 million, money that he said "should be insulated from the federal budget base."
GeoEye last year had hired Goldman Sachs to find a buyer, attracting some private equity interest, but no deal resulted from the strategic review, according to sources familiar with the process. However, industry executives say the drop in the company's share price could make it a more attractive target.
It was not immediately clear if DigitalGlobe had also explored a possible sale.
(Reporting By Andrea Shalal-Esa; additional reporting by Soyoung Kim in New York; Editing by Phil Berlowitz)
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