Press Release

Intelsat to Be Acquired by Consortium of Private Investors

By SpaceRef Editor
August 16, 2004
Filed under , ,

Transaction Valued at Approximately $5 Billion

Intelsat, Ltd.,
a global satellite communications leader providing services in over
200 countries and territories, today announced the signing of a
definitive agreement that provides for the amalgamation under Bermuda
law of Intelsat and a subsidiary of Zeus Holdings Limited (“Zeus”), a
company formed by a consortium of funds advised by Apax Partners,
Apollo Management, Madison Dearborn Partners and Permira. At closing,
Zeus will be acquiring Intelsat, and Intelsat’s current shareholders
generally will be entitled to receive $18.75 for each Intelsat share
issued and outstanding immediately prior to closing, subject to
adjustment in a specified circumstance. The total value of the
transaction, including approximately $2 billion of existing net debt,
is approximately $5 billion. The transaction was approved unanimously
by the Intelsat, Ltd. Board of Directors.

“This transaction comes at a time when Intelsat is successfully
executing on its strategies for market leadership in the fixed
satellite services sector. We believe that the acquisition of Intelsat
by this consortium of well-respected private equity investors
represents the best opportunity for Intelsat to achieve its strategic
goals,” said Intelsat, Ltd. Chief Executive Officer Conny Kullman.
“Once completed, this transaction will both satisfy our shareholders’
interest in a strong valuation and allow shareholders to monetize
their investments. At the same time, the deal will align Intelsat’s
future with a force that can make our vision for continued leadership
a reality.”

“Our consortium is very pleased to begin a partnership with
Intelsat, a global leader in the fixed satellite services sector.
Intelsat’s healthy, young and flexible satellite fleet, seasoned
management team, strong brand and solid backlog of long-term contracts
create a very attractive investment opportunity,” said the
representatives of the consortium. “As Intelsat enters its next stage
of strategic development, its operational strength, stable,
diversified revenue base and global market presence offer the company
a variety of exciting organic and strategic growth opportunities, and
the consortium will provide the financial and strategic support
Intelsat needs to capitalize on these opportunities.”

At closing, all of the existing service commitments between
Intelsat and its customers, including those dating from the
privatization in 2001, will remain in force. “Intelsat and members of
the consortium understand that strong and stable media,
communications, corporate and government customers are the lifeblood
of Intelsat’s business. Although the satellite industry continues to
evolve, our commitment to our customers, including continuing to
deliver the ‘gold standard’ in satellite services, remains unchanged,”
said Intelsat CEO Kullman.

Required approval of shareholders holding 60% of Intelsat’s
outstanding shares will be sought in a general meeting of shareholders
expected to be held later this year. The closing of the transaction is
subject to the satisfaction or waiver of several conditions, including
the receipt of shareholder and regulatory approvals. Intelsat
currently expects that required approvals could be obtained and
closing could occur as early as the end of 2004.

Zeus has obtained commitments for financing the acquisition,
subject to the satisfaction of customary conditions. Intelsat
understands that Zeus intends to finance the transaction in part with
debt that, after giving effect to the transaction and consistent with
the terms of Intelsat’s existing indebtedness, will be at the Intelsat
(Bermuda), Ltd. level. The security expected to be granted in
connection with this new debt will be in compliance with the terms of
Intelsat’s existing indebtedness and is not expected to result in the
grant of security to the company’s existing senior notes.

Merrill Lynch and Morgan Stanley are acting as financial advisors
to Intelsat, Ltd. in connection with the transaction. Credit Suisse
First Boston, Goldman, Sachs & Co. and Lehman Brothers Inc. are acting
as financial advisors to the consortium in connection with the
transaction. The new debt financing will be led by Deutsche Bank
Securities Inc., Credit Suisse First Boston and Lehman Brothers Inc.

About Intelsat

Building on 40 Years of Leadership. As a global communications
leader with 40 years of experience, Intelsat helps service providers,
broadcasters, corporations and governments deliver information and
entertainment anywhere in the world, instantly, securely and reliably.
Intelsat’s global reach and expanding solutions portfolio enable
customers to enhance their communications networks, venture into new
markets, and grow their businesses with confidence. For more
information, visit www.intelsat.com.

About Apax Partners

Apax Partners is one of the world’s leading private equity
investment groups, operating across Europe, Israel, the United States
and Japan. With over 30 years of direct investing experience, Apax
Partners’ Funds provide long-term equity financing to entrepreneurs to
build and strengthen world-class companies. It pursues a balanced
equity portfolio strategy, investing in companies at all stages of
development from early stage to buy-out. Apax Partners’ Funds invest
in companies across its six chosen global sectors of information
technology, telecommunications, healthcare, media, financial services,
retail and consumer. Some of Apax Partners’ Funds information
technology and telecommunications investments include Audible, Dialog
Semiconductor, Frontier Silicon, Jamdat, Kabel Deutschland, Sonim
Technologies and Yell. For additional information, visit the web site
at www.apax.com.

About Apollo

Apollo, founded in 1990, is among the most active and successful
private investment firms in the U.S. in terms of both number of
investment transactions completed and aggregate dollars invested.
Since its inception, Apollo has managed the investment of an aggregate
of approximately $13 billion in equity capital in a wide variety of
industries, both domestically and internationally.

About Madison Dearborn Partners

Madison Dearborn Partners (MDP), based in Chicago, is one of the
largest and most experienced private equity firms in the United
States. MDP has approximately $8 billion of equity capital under
management and makes new investments through its most recent fund,
Madison Dearborn Capital Partners IV, L.P., a $4.0 billion fund raised
in 2001. MDP focuses on management buyout and other private equity
investments across a broad spectrum of industries, including basic
industries, communications, consumer, financial services and
healthcare. Over the last decade, MDP has been an active investor in
the communications industry, with investments in such companies as
Omnipoint Corporation, Nextel Partners, Telemundo Communications
Group, Clearnet Communications, and XM Satellite Radio, Inc. For
additional information, visit the web site at www.mdcp.com.

About Permira

Permira is a leading global private equity firm, advising funds of
$13 billion, including Permira Europe III, a E5.1 billion fund raised
in 2003. Permira is an independent business with offices in Frankfurt,
London, Madrid, Milan, New York, Paris and Stockholm, focusing on
buyout transactions across a number of sectors, including technology &
telecom, consumer, business services, chemicals, industrial products
and services, and healthcare. Since 1985, funds advised by Permira
have invested in over 260 transactions and have an investor base
comprising principally public and corporate pension funds and other
institutions. For additional information, visit the web site at
www.permira.com.

Note: Some of the statements in this news release constitute
forward-looking statements that do not directly or exclusively relate
to historical facts, including statements relating to Intelsat’s
belief that the acquisition of Intelsat by the consortium of private
equity investors represents the best opportunity for Intelsat to
achieve its strategic goals, Intelsat’s belief that the transaction
will align Intelsat’s future with a force that can make Intelsat’s
vision for continued leadership in the fixed satellite services sector
a reality, Intelsat’s expectation that required approvals could be
obtained and closing could occur as early as the end of 2004, and Zeus
Holdings Limited’s intended financing for the acquisition. The Private
Securities Litigation Reform Act of 1995 provides a “safe harbor” for
certain forward-looking statements as long as they are identified as
forward-looking and are accompanied by meaningful cautionary
statements identifying important factors that could cause actual
results to differ materially from the expectations expressed or
implied in the forward-looking statements. When used in this news
release, the words “plan,” “expect,” “intend,” “outlook,” “believe”
and other similar expressions are intended to identify forward-looking
statements. The forward-looking statements made in this news release
reflect Intelsat’s intentions, plans, expectations, assumptions and
beliefs about future events and are subject to risks, uncertainties
and other factors, many of which are outside of Intelsat’s control. In
connection with the proposed acquisition of Intelsat by the consortium
of private equity investors, known risks include, but are not limited
to, the inability to obtain shareholder approval of the transaction;
the inability to obtain required regulatory approvals or the need to
modify aspects of the transaction in order to obtain such approvals;
and the inability to complete the transaction. Known risks also
include, but are not limited to, insufficient market demand for the
services offered by Intelsat; the quality and price of services
offered by Intelsat’s competitors; the risk of delay in implementing
Intelsat’s business strategy; Intelsat’s access to sufficient capital
to meet its operating and financing needs; changes in laws and
regulations or the inability to maintain required governmental
authorizations; political, economic and legal conditions in the
markets Intelsat is targeting for communications services or in which
Intelsat operates; general economic conditions; and a change in the
health of Intelsat’s satellites or a catastrophic loss occurring
during the in-orbit operations of any of Intelsat’s satellites. More
detailed information about known risks is included in Intelsat’s
annual report on Form 20-F for the year ended December 31, 2003 on
file with the U.S. Securities and Exchange Commission. Because actual
results could differ materially from Intelsat’s intentions, plans,
expectations, assumptions and beliefs about the future, you are urged
to view all forward-looking statements made in this news release with
caution. Intelsat does not undertake any obligation to update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise.

SpaceRef staff editor.