Simpson Thacher advised Global Eagle Entertainment Inc. (NASDAQ: ENT) on the transaction
Global Eagle Entertainment Inc. (NASDAQ:ENT) a leading provider of media, content, connectivity and data analytics to markets across air, sea and land, today announced that it has agreed to a significant investment from funds managed by Searchlight Capital Partners, L.P., a global private investment firm.
Searchlight will invest $150 million of new capital into Global Eagle. Searchlight will receive $150 million aggregate principal amount of the Company’s new second-lien notes due June 30, 2023. The notes include initial payment-in-kind interest at 12% per annum that later converts to payment in cash at 10% per annum. Searchlight will receive a warrant to purchase approximately 18.1 million shares of Global Eagle common stock for $0.01 per share. This warrant is not exercisable until January 1, 2021, and only then if the 45-day VWAP of the Company’s common stock has been at or above $4.00 per share following the closing. Searchlight will also receive a “market warrant” to purchase an additional 13.0 million shares of Global Eagle common stock for $1.57 per share. The market warrant is not exercisable until January 1, 2021, and only then if the 45-day VWAP of the Company’s common stock has been at or above $2.40 per share following the closing. Searchlight may not transfer the notes, the warrants or the shares underlying the warrants to an unaffiliated third party before January 1, 2021. Nasdaq has completed its review of the transaction, and the Company anticipates that the transaction will close before March 31, 2018.
Global Eagle expects that the net proceeds from the transaction will be approximately $142 million, after payment of fees and expenses, which will significantly strengthen the Company’s balance sheet and liquidity. The Company intends to use a portion of the proceeds to repay the full $78 million principal balance on the Company’s revolving credit facility, following which the full $85 million facility will remain available to the Company. The Company anticipates using the remaining proceeds for growth initiatives and other general corporate purposes.
In connection with the investment, the Company intends to appoint Eric Zinterhofer and Eric Sondag to the Company’s Board of Directors. Messrs. Zinterhofer and Sondag are both Partners at Searchlight and experienced investors in the media and technology industries. Mr. Zinterhofer currently serves on the board of Charter Communications, Inc.
Barclays acted as Global Eagle’s placement agent for the transaction.
The Simpson Thacher team included William Brentani (Picture), Kim de Glossop, Karen Reyes, Kelli Schultz and Alexis Orenstein (Corporate); and Katharine Moir and Nicole Humphrey (Tax).
Involved fees earner: William Brentani – Simpson Thacher & Bartlett; Kim de Glossop – Simpson Thacher & Bartlett; Karen Reyes – Simpson Thacher & Bartlett; Kelli Schultz – Simpson Thacher & Bartlett; Alexis Orenstein – Simpson Thacher & Bartlett; Katharine Moir – Simpson Thacher & Bartlett; Nicole Humphrey – Simpson Thacher & Bartlett;
Law Firms: Simpson Thacher & Bartlett;
Clients: Global Eagle Entertainment Inc.;