Dish Network said on Monday that it’s buying EchoStar’s Broadcast Satellite Service (BSS) business in an all-stock transaction that values the business at about $800 million.
Dish is getting nine direct broadcast satellites and the certain key employees responsible for satellite operations, licenses and select real estate properties. EchoStar shareholders are getting about 22.9 million shares in Dish. The transaction will be a tax-free exchange and the companies expect to close in the second half of 2019.
"In 2017, when Dish acquired the EchoStar assets that we needed to deliver the Dish TV and Sling TV customer experiences, key broadcast satellite operations and services remained with EchoStar," said Dish President and CEO Erik Carlson in a statement. "This transaction brings those operations, including the BSS satellites, associated assets and key team members, in house and we expect those additions will create operational efficiencies and improve both free cash flow and EBITDA."
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For the most recent quarter, Dish reported total EBITDA of $597 million, down 10.9% year over year. The decline was largely caused by lower operating income attributed to a shrinking pay TV subscriber base.
Today’s announcement regarding the BSS service comes about two years after Dish announced a similar tax-free deal to acquire set-top manufacturing and development operations along with various Sling TV components from EchoStar.
“With this transaction, we will vertically integrate all the elements that define our customer experience—one team will deliver the full Dish and Sling TV experience end to end,” said Carlson to the Denver Business Journal at the time the deal was announced. “Not only do we gain full control of the product development roadmap for [satellite] and Sling TV, but we also anticipate achieving operational efficiencies.”