Geoeye Agrees To Cerberus Deal

(Reuters) GeoEye Inc entered into a financing deal with private equity firm Cerberus Capital Management, in a move that would help the satellite imagery company win a federal contract.

GeoEye said it recently submitted a bid for the U.S. government’s EnhancedView contract that requires bidders, who want financial support from the government to build a satellite, to provide a letter of credit that would act as collateral.

Under the terms of the commitment letter, which is subject to GeoEye winning a contract, the company will sell preferred shares to Cerberus and receive gross proceeds of $112.1 million.

If GeoEye gets an award without the letter of credit option, Cerberus will have the option to purchase 80,000 preferred shares for $78 million.

“The Cerberus commitment gives us a fully financed proposal, including the new letter of credit requirement, which the company believes enhances our ability to win an EnhancedView contract,” GeoEye’s CEO Matt O’Connell said in a statement.

Separately, GeoEye also reported fourth-quarter results and provided 2010 outlook. (Reporting by A.Ananthalakshmi in Bangalore; Editing by Bijoy Koyitty)