Dubai: UAE’s newly created space technology company will have a market cap of Dh12 billion based on the closing share prices of ADX-listed merger partners Bayanat and Yahsat as of March 20.
The entity thus established – Space42 – will thus be ‘one of the most valuable publicly listed space companies in the world by market capitalization’. And with ‘additional potential for significant global growth and synergies’, according to a statement.
In December last, Bayanat, a tech company focused on AI possibilities, and Yahsat, which is into satellite-based services, confirmed they were onto a merger to create significant scale and reap benefits as an ‘AI-powered space technology champion in the MENA region’.
“The combined group is expected to benefit from considerable revenue synergies and economies of scale that will best position the organisation for innovation and profitable growth,” said the statement.
The effective date of merger will be in the third quarter of 2024. Based on a pro forma consolidated statement, Space42 will have total assets of Dh14.8 billion, Dh984.6 million by way of revenues, and Dh244 million in profit.
What will shareholders get?
Once the merger approvals are in, new Bayanat shares will be issued to Yahsat shareholders. Each Yahsat share will be entitled to 0.897 by way of new shares issued in Bayanat.
"With a strengthened financial position, enhanced AI-powered technological capabilities and a diversified product portfolio, the combination will also establish a platform for transformative technologies to enable space-based services with significant impact on societies and economies," is what Bayanat-Yahsat is setting sights on.
Yahsat already has a sizeable multi-year contractual work from the federal government for its various satellite and space requirements. It has a fleet of five satellites (and a sixth to launch this year and a further two planned for launch in 2027 and 2028) with the 'potential to reach geographies representing more than 80 per cent of the world’s population'.
Set up in 2007, Yahsat has 'one of the strongest balance sheets in the industry', with negative net debt (as of September 30, 2023) and contracted future revenues of $6.9 billion.
Bayanat, which listed on ADX in October 2022, too has picked up prestige contracts for its raft of AI-backed services, including geospatial, smart mobility and space solutions.
Factor in volatility
"Given the awareness in the market of the merger, it is likely that there will be increased volatility in the share price of Bayanat and Yahsat until the merger is finalised," the statement notes.
Yahsat is trading at Dh2.22 while Bayanat is at Dh2.53. Foreign ownership in the latter is at 79.15 per cent.
The merger is subject to regulatory approvals from governmental authorities, including the Securities and Commodities Authority, the ADGM Registration Authority, and various international regulatory authorities.
Also required is approval of shareholders representing 75 per cent of the voting rights present at a general assembly meeting held by Bayanat and Yahsat. Both companies will continue to operate independently until the merger is effective.
