KVH has announced that it has sold its maritime training business, the Videotel group of companies, to an affiliate of private equity firm Oakley Capital for US$90 million.
The $90 million base purchase price is subject to adjustment for Videotel’s cash, indebtedness, and working capital, with KVH expecting to receive payment within 30 business days, subject to subsequent adjustment for working capital.
“As part of our long-term strategic roadmap, we are focusing on the large and growing markets of our core mobile connectivity and inertial navigation businesses,” said Martin Kits van Heyningen, Chief Executive Officer of KVH.
“We intend to use the net proceeds of the sale to invest in three key growth initiatives that we expect will drive significant value creation, as well as to reduce our debt. Specifically, we plan to invest in the development and commercialisation of our photonic integrated chip technology for use in autonomous vehicles and other commercial and military platforms, to support the further acceleration of our AgilePlans (Connectivity as a Service) programme, and also to finalise the development and launch of our IoT connectivity solution.”
“Videotel helped us to penetrate the commercial maritime markets initially, but our strategic approach has evolved to focus on faster growing markets that we believe will produce greater long-term shareholder value.”
KVH purchased maritime e-learning provider Videotel in 2014, in a deal worth approximately $49 million, as part of its strategy to expand its content delivery capabilities and gain access to the 11,000 vessels using Videotel services at that time.
KVH says that it has retained certain rights to continue including Videotel training content within its AgilePlans programme, to maintain continuity of service for existing customers.