Global Eagle Acquisition Corp., Founded By Harry Sloan And Jeff
Sagansky, Announces Acquisition Of Row 44, Inc. And Approx. 86%
Stake In Advanced Inflight Alliance AG. Transaction Valued At
Approximately $430 Million
LOS ANGELES, Nov. 8, 2012 /PRNewswire/ -- Global Eagle
Acquisition Corp. (NASDAQ: EAGL; EAGLW; EAGLU) (Global Eagle) today
announced the signing of definitive agreements under which Global
Eagle will acquire Row 44, Inc. (Row 44) and approximately 86% of
the issued and outstanding shares of Frankfurt-listed Advanced
Inflight Alliance AG (GR: DVN1) (AIA) to create the largest
entertainment and connectivity platform for the worldwide airline
industry. AIA is the leading supplier of games, movies, general
entertainment and applications to the airline industry, serving
more than 130 airlines worldwide. Row 44 is a leading
satellite-based broadband service provider to the global airline
industry, with its inflight entertainment connectivity system
currently installed on more than 400 aircraft that operate over
land and sea worldwide.
(Logo:
http://photos.prnewswire.com/prnh/20121108/LA09152LOGO)
Global Eagle is a special purpose acquisition company which
raised approximately $190 million in
its initial public offering in May 2011. Global Eagle's
founders, Harry Sloan and
Jeff Sagansky, believe that this
marriage of content, connectivity and capital will create a
superior platform to exploit the rapidly expanding global airline
industry as it increasingly focuses on the in-cabin entertainment
experience and other ancillary revenue opportunities.
Following the closing, Global Eagle will own 100% of the
equity of Row 44 and approximately 86% of the issued and
outstanding shares of AIA, and be renamed Global Eagle
Entertainment Inc. Global Eagle intends to apply to list its
shares of common stock on the Nasdaq Stock Market under the symbol
"ENT."
Global Eagle is purchasing the AIA shares from PAR Investment
Partners, L.P. (PAR), which is also a major shareholder of Row 44.
AIA separately will retain its listing on the Frankfurt Stock
Exchange (with trading of its shares in Deutsche Borse's Xetra
trading system), with approximately 14% of the shares held by
public shareholders.
In support of this transaction, Global Eagle has arranged for
leading institutional investors, including PAR, to purchase 7.125
million shares of common stock of Global Eagle to the extent any
public stockholders of Global Eagle redeem their
shares. In the event there are no redemptions or less
than 7.125 million public shares are redeemed, the backstop
investors also have an option to purchase up to a total of 7.125
million shares. The shares of common stock that PAR will receive
pursuant to the Backstop Agreement may include shares of voting and
non-voting Global Eagle common stock.
In making the announcement, Harry
Sloan, Chairman and CEO of Global Eagle, stated, "By
combining AIA's access to the installed inflight entertainment
market with Row 44's WiFi to mobile device capability, Global Eagle
has potential access to 100% of the airline passenger experience,
creating an addressable market as large as the global airline
industry. This is exactly the kind of worldwide digital media
opportunity we've been seeking for Global Eagle since our IPO; and
this is also a platform for Jeff and me to utilize our media and
content relationships and experience to drive expansion and
enhancement of inflight content and programming around the world.
"
Edward L. Shapiro, a partner of
PAR Capital Management and Chairman of the Board of Row 44 and
Chairman of AIA's Supervisory Board, who will become Chairman of
Global Eagle Entertainment after the closing, stated, "We are
extremely excited about this business combination. Row 44 and
AIA are leaders in their respective industries and have highly
complementary products and customer bases. With this
transaction, not only will the two companies be able to enhance
their offerings, but they will gain access to additional capital
and relevant entertainment industry experience."
Shapiro added, "I have had the privilege of working closely with
the very talented Row 44 and AIA management teams and I look
forward to continuing this work as we enter this next phase of
accelerating industry adoption of wireless content delivery.
I have known both Harry and Jeff for more than ten years and am
eager to have them as partners as we build Global Eagle
Entertainment into a leading global media company."
All the members of Row 44 and AIA senior management teams,
including John LaValle as CEO of Row
44 and Louis Belanger-Martin as CEO
of AIA, will continue in their current positions under the new
ownership structure.
Summary of Business Combination Transaction
Under the terms of the proposed business combination, Global
Eagle will become the owner of all of the equity of Row 44 pursuant
to the terms of the merger agreement entered into today. In
addition, Global Eagle will become the owner of approximately 86%
of the issued and outstanding shares of AIA pursuant to the terms
of the Stock Purchase Agreement also entered into today with
PAR.
Under the AIA Stock Purchase Agreement, Global Eagle will issue
approximately 14,368,000 shares of non-voting common stock to PAR
Capital for its 20,464,581 shares of AIA, representing a purchase
price of EUR 5.50 per share and
assuming a Euro to U.S. dollar exchange rate of 1.27655.
Pursuant to the Row 44 Merger Agreement, at the closing, Global
Eagle will issue approximately 25 million shares of common stock to
the equity holders of Row 44 representing a total enterprise value
consideration of $250 million,
subject to adjustments as defined in the Merger Agreement.
Preliminarily, these adjustments are expected to result in the
issuance of approximately 22.5 million shares to the equity holders
of Row 44 at closing, a payment of approximately $12 million in cash to PAR, as the first party to
commit to a backstop agreement, and the assumption of certain
warrants. PAR currently owns approximately 86% of the issued
and outstanding shares of AIA and more than 40% of the issued and
outstanding equity of Row 44. AIA currently owns approximately 13%
of the issued and outstanding equity of Row 44.
Assuming no redemptions of Global Eagle stock by its public
stockholders, the current stockholders of Global Eagle, the current
owners of Row 44 (excluding PAR Capital and AIA), PAR and AIA
(approximately 86% of which will be owned by Global Eagle) will
hold approximately 39%, 17%, 39% and 5%, respectively, of the
issued and outstanding shares of Global Eagle Entertainment Inc.
common stock immediately following the closing.
The cash currently held in Global Eagle's trust account will be
used to fund any redemptions by public stockholders of Global Eagle
of their common stock, accrued expenses and transaction expenses
and fees, with any remaining cash being used for working capital
and capital expenditures to facilitate growth and industry
consolidation initiatives and other general corporate purposes.
The boards of directors of Global Eagle and Row 44 have
unanimously approved the Row 44 Merger Agreement and the board of
directors of Global Eagle and PAR have each approved the sale of
PAR's AIA shares. Completion of the transaction, which is expected
to occur in January 2013, is subject
to approval by Global Eagle and Row 44 stockholders, the expiration
or early termination of the waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, any
applicable non-U.S. antitrust approvals and other customary closing
conditions.
Citigroup is acting as lead capital markets advisor to Global
Eagle, and BofA Merrill Lynch and Citigroup are providing financial
advisory services to Global Eagle. RBC Capital Markets is
providing advisory services to AIA. Seabury Group, LLC is
providing advisory services to Row 44. Legal counsel to
Global Eagle is McDermott Will &
Emery LLP. Legal counsel to PAR are Goodwin Procter LLP and SJ
Berwin. Legal counsel to Row 44 is Strategic Law Partners,
LLP.
The description of the business combination contained herein
is only a summary and is qualified in its entirety by reference to
the definitive agreements relating to the transaction, copies of
which will be filed by Global Eagle with the Securities and
Exchange Commission (SEC) as exhibits to a Current Report on Form
8-K.
Conference Call Scheduled
Global Eagle will host a conference call to discuss the proposed
business combination with the investment community on Thursday, November 8, 2012 at 4:30pm EST. Investors may participate in
the conference call by dialing (800) 860-2442 toll free in the US,
(866) 605-3852 toll free in Canada
or (412) 858-4600 internationally. A replay will be available one
hour after the end of the conference until 9:00am on November 16,
2012 by dialing (877) 344-7529 toll free in the US or (412)
317-0088 internationally and entering conference number
10021300.
Additional information about the business combination will be
included by Global Eagle as an exhibit to a Current Report on Form
8-K that will be furnished to the Securities and Exchange
Commission prior to the conference call. Interested parties
should visit the SEC website at www.sec.gov.
About Advanced Inflight Alliance AG
Advanced Inflight Alliance AG (AIA) is the world's leading
provider of innovative content and solutions for the inflight
entertainment industry. Listed on the Frankfurt Stock Exchange,
AIA's subsidiaries are market-leading companies pioneering in the
"passenger experience" sector which provide content solutions such
as international and local audio, video, applications, games and
services to the majority of the world's airlines. AIA was
incorporated in Germany in 1998
and completed its initial public offering in 1999.
About Row 44
Row 44 is a satellite-based broadband services provider to the
global commercial airline industry. Its network enables
airlines to connect to orbiting Ku-band satellites and to
communicate with existing satellite ground earth stations.
Row 44's in-cabin communication link currently provides airline
passengers with Internet access, live television, shopping and
flight and destination information. Row 44 was formed in
2004, its WiFi connectivity system was first deployed by a domestic
commercial airline in 2009 and its broadband services were fully
operations in 2010. Currently installed on more than 400
aircraft, Row 44 has the largest fleet of connected entertainment
enabled planes that operate over land and sea worldwide.
About Global Eagle
Global Eagle Acquisition Corp. is a special purpose acquisition
company formed for the purpose of effecting a merger, capital stock
exchange, asset acquisition, stock purchase, reorganization or
similar business combination involving Global Eagle Acquisition
Corp. and one or more businesses. Global Eagle Acquisition
Corp. is a Delaware corporation
formed in 2011. It raised approximately $190 million in its IPO in May 2011 and its securities are traded on NASDAQ
under the ticker symbols EAGL, EAGLW and EAGLU.
* Adjusted EBITDA represents a non-GAAP measure of financial
results and reflects revenues less operating expenses, excluding
depreciation and amortization.
ADDITIONAL INFORMATION ABOUT THE BUSINESS COMBINATION AND
WHERE TO FIND IT
Global Eagle intends to file with the Securities and Exchange
Commission (SEC) a preliminary proxy statement of Global Eagle in
connection with the proposed business combination and will mail a
definitive proxy statement and other relevant documents to its
stockholders. Global Eagle stockholders and other interested
persons are advised to read, when available, the preliminary proxy
statement, and amendments thereto, and definitive proxy statement
in connection with Global Eagle's solicitation of proxies for the
special meeting to be held to approve the business combination
because the proxy statement will contain important information
about AIA, Row 44, Global Eagle and the proposed business
combination. The definitive proxy statement will be mailed to
stockholders of Global Eagle as of a record date to be established
for voting on the business combination. Stockholders will also be
able to obtain copies of the proxy statement, without charge, once
available, at the SEC's Internet site at http://www.sec.gov, or by
directing a request to: Global Eagle Acquisition Corp., 10900
Wilshire Blvd., Suite 1500, Los Angeles,
CA 90024. Attn.: James A.
Graf, Chief Financial Officer.
PARTICIPANTS IN THE SOLICITATION
Global Eagle and its directors and officers may be deemed
participants in the solicitation of proxies to Global Eagle's
stockholders with respect to the transaction. A list of the names
of those directors and officers and a description of their
interests in Global Eagle is contained in Global Eagle's annual
report on Form 10-K for the fiscal year ended December 31, 2011, which was filed with the SEC,
and will also be contained in the proxy statement for the
proposed business combination when available.
FORWARD LOOKING STATEMENTS
This press release may include "forward looking statements"
within the meaning of the "safe harbor" provisions of the United
Stated Private Securities Litigation Reform Act of 1995.
Forward-looking statements may be identified by the use of words
such as "anticipate", "believe", "expect", "estimate", "plan",
"outlook", and "project" and other similar expressions that predict
or indicate future events or trends or that are not statements of
historical matters. Such forward looking statements with respect to
the timing of the proposed business combination with Row 44 and
AIA, as well as the expected performance, strategies,
prospects and other aspects of the businesses of Global Eagle, AIA,
Row 44 and the combined company after completion of the proposed
business combination, are based on current expectations that are
subject to risks and uncertainties.
A number of factors could cause actual results or outcomes to
differ materially from those indicated by such forward looking
statements. These factors include, but are not limited to: (1) the
occurrence of any event, change or other circumstances that could
give rise to the termination of the Row 44 Merger Agreement or the
AIA Stock Purchase Agreement (the "Business Combination
Agreements"), (2) the outcome of any legal proceedings that may be
instituted against Global Eagle, AIA, Row 44 or others following
announcement of the Business Combination Agreements and
transactions contemplated therein; (3) the inability to complete
the transactions contemplated by the Business Combination
Agreements due to the failure to obtain approval of the
stockholders of the Global Eagle or other conditions to closing in
the Business Combination Agreement, (4) delays in obtaining,
adverse conditions contained in, or the inability to obtain
necessary regulatory approvals or complete regulatory reviews
required to complete the transactions contemplated by the Business
Combination Agreements; (5) the risk that the proposed transaction
disrupts current plans and operations as a result of the
announcement and consummation of the transactions described herein;
(6) the ability to recognize the anticipated benefits of the
business combination, which may be affected by, among other things,
competition, the ability of the combined company to grow and manage
growth profitably, maintain relationships with suppliers and obtain
adequate supply of products and retain its key employees; (7) costs
related to the proposed business combination; (8) changes in
applicable laws or regulations; (9) the possibility that AIA and
Row 44 may be adversely affected by other economic, business,
and/or competitive factors; and (10) other risks and uncertainties
indicated from time to time in the proxy statement to be filed by
Global Eagle with the SEC, including those under "Risk Factors"
therein, and other filings with the SEC by Global
Eagle.
Readers are cautioned not to place undue reliance upon any
forward-looking statements, which speak only as of the date made,
and Global Eagle, AIA and Row 44 undertake no obligation to update
or revise the forward-looking statements, whether as a result of
new information, future events or otherwise.
SOURCE Global Eagle Acquisition Corp.