Indra Sistemas (IDR) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition of majority stakes in Hispasat and Hisdesat aligns with strategy to become a leading integrated European space player, focusing on secure communications, surveillance, and strategic autonomy for civil and military applications.

• Space is identified as a critical growth pillar, enabling end-to-end capabilities across the value chain, especially in LEO satellite manufacturing and downstream services.

• The deal supports ambitions to achieve a €1B+ revenue target for the space business by 2030, with a dual civil-military offering.

• Hispasat and Hisdesat provide high-tech satellite services, enabling delivery of end-to-end space missions and expansion in major European programs like IRIS².

• Enhances capabilities in government satellite services, particularly in defense, security, intelligence, and foreign affairs.

Financial terms and conditions

• Agreed transaction equity value is EUR 725 million for majority stakes in Hispasat (89.68%) and Hisdesat.

• Implied transaction multiples: 6.9x EV/EBITDA 2024 (pre-synergies), 5.2x (with synergies), and 3.9x by 2026 (with EBITDA growth and synergies).

• Hispasat's EUR 157 million net debt is offset by Hisdesat's net cash, resulting in no net debt impact except for the acquisition loan.

• Acquisition is fully financed with EUR 700 million in secured bank debt and the remainder from cash.

• Transaction is EPS-accretive by 2026 and supports all financial targets, including net debt/EBITDA ratios.

Synergies and expected cost savings

• Operational and commercial synergies projected to generate EUR 20–30 million EBITDA by 2026, rising to EUR 50–70 million by 2030.

• Synergies stem from standardization in LEO satellite manufacturing, cross-selling, expanded commercial reach, and internalizing upstream services.

• No restructuring costs anticipated; integration expected to require more personnel due to growth.