GI Partners, the private equity company that bought Vast Broadband last year, has agreed to purchase Orbcomm in a cash and assumed debt transaction that values the network equipment maker at about $1.1 billion.

As part of the deal, which will take the company private, Orbcomm shareholders will receive $11.50 in cash for every share of the company they own. In addition, GI Partners will assume about $200 million in Orbcomm debt. The deal, expected to close in the second half of the year, represents a 52% premium to Orbcomm’s share price on April 7 of $7.57 each. Orbcomm shares immediately rose past the offering price, and were up 53% ($3.97 each) to $11.55 per share in early tradingThursday. 

Orbcomm makes telematic devices, modems and other network products and said the deal will help it gain momentum in the Internet of Things (IoT) space as well as help it increase sales, marketing technology innovation and expand globally. When the deal closes, Orbcomm will no longer be a public company. 

“This transaction will provide immediate and substantial value to ORBCOMM stockholders, reflecting the tremendous commitment and work of our employees and stakeholders. The partnership with GI Partners will provide us the opportunity to rapidly advance our long-term strategy,” Orbcomm CEO Marc Eisenberg said in a press release. “GI Partners has an established track record of working with companies to accelerate growth, and we look forward to continuing to drive innovation, providing world-class service to our global customers and expanding our market share in the industrial IoT as a privately held company.”

Orbcomm said its board of directors has unanimously approved the deal and said a special meeting of shareholders will be held as soon as practicable to vote on the transaction.

“Orbcomm has a long history of innovation, providing mission-critical services to customers across the global logistics landscape and a broad range of other industries,” GI Partners managing director Mark Prybutok said in a press release. “We are excited to work with the Orbcomm team to take the business forward as IoT use cases continue to evolve and grow.”

GI Partners primarily invests in data infrastructure companies and in October purchased Vast Broadband, a high-speed data service provider with about 60,000 customers in South Dakota and Minnesota. In 2012 it teamed up with Oak Hill Capital Partners to buy Wave Broadband, selling that interest five years later to TPG Capital.  TPG sold Wave along with RCN, Grande Communications and enTouch Communications (collectively known as Astound Broadband) in a deal valued at $8.1 billion. 

The deal also allows Orbcomm to seek out another buyer during a 30-day “go shop” period that will expire on May 7.  

Vast Broadband, which provides broadband and video service to about 60,000 residential and business customers in South Dakota and Minnesota, said that it has agreed to be purchased by private equity firm GI Partners. Terms were not disclosed.

Vast Broadband, based in Sioux Falls, South Dakota, was formed in 2013 by industry veteran James Gleason and private equity players Pamlico Capital and Oak Hill Capital. 

GI Partners has invested in several data infrastructure companies, including Wave Broadband (which it sold in 2017 to TPG Capital). In the Vast Broadband deal, GI is partnering with former Wide Open West chief financial officer  Rich Fish, who  become CEO of Vast after the deal is closed.

“Vast is committed to providing its customers with access to the most reliable, high-speed broadband connectivity available,” Fish said  in a press release.  “As a native of the Great Plains, I am thrilled to partner with the local employees at Vast to bring high quality internet connectivity to my home region.”

The transaction is expected to close following satisfaction of customary closing conditions, including regulatory approvals.  GI Partners will make the investment from the GI Data Infrastructure Fund. Weil, Gotshal & Manges acted as legal counsel to GI Partners.  RBC Capital Markets, LLC acted as exclusive financial advisor to Vast Broadband and Alston & Bird acted as legal counsel.

“We are very pleased to have reached an agreement with Rich Fish and the GI Partners team.  We have had tremendous success during our tenure and we are delighted that our team in South Dakota and Minnesota will have the opportunity to continue to grow in the communities we serve,” Gleason said in a press release.