Deal is valued at $23.9 million
Global Eagle Entertainment will buy in-flight entertainment company Post Modern Group in a deal worth as much as $23.9 million.
With the acquisition, Global Eagle said it will become the biggest provider of television shows and movies to airlines in the world.
The pact involves a combination of cash and stock. Global Eagle was founded in 2011 by former MGM CEO and chairman Harry Sloan and former CBS Entertainment president Jeff Sagansky (pictured left).
The media company has invested heavily in the in-flight entertainment sphere, both on the content side and in the internet connectivity space.
In November 2012, the company acquired Row 44, a leading satellite-based broadband service for the airline industry, and a majority stake in Advanced Inflight Alliance, a supplier of games, movies and entertainment for airlines, in deals valued at $430 million. It has continued to build up its control of AIA by tendering shares, which has given a 94 percent ownership position.
Global Eagle said its agreement to purchase Post Modern will enhance its relationships with airlines around the world and allow it to enter into the cruise line industry.
"The in-flight business is a highly fragmented, small mom-and-pop shop business," Dave Davis, chief financial officer of Global Eagle Entertainment, told TheWrap. "We think there is a real opportunity to bring together a fragmented industry and bring professional management to the business by improving margins, our service to the airlines and our relationships with studios."
Post Modern Group works with more than 10 motion picture and television distributors and 50 airlines and cruise lines. It is expected to generate over $35 million in revenues and in excess of $4.5 million in adjusted EBITDA in 2013, the company said.
It has roughly 130 employees. Global Eagle's workforce currently stands at 500, Davis said.
Global Eagle said the deal for Post Modern Group is expected close in the third quarter of 2013.
Davis said that Global Eagle is still looking for other companies to acquire.
"We are still definitely a buyer — not only on the content side but in the internet connectivity space," he said.
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