Calian acquires Galaxy Broadband for $24M, eyes Arctic expansion

Calian Group has agreed to purchase Galaxy Broadband Communications, a Mississauga-based satellite services provider, for $24 million, with potential earnout payments of up to $27.5 million over three years if Galaxy hits certain revenue targets.

The acquisition is expected to close within 60 to 75 days pending regulatory approval. Galaxy, founded over 30 years ago, operates low-Earth-orbit satellite, microwave, and fibre communications infrastructure serving federal, provincial, and municipal governments, the Canadian Armed Forces, Indigenous communities, mining companies, and other customers in remote regions like the Canadian North.

The company currently employs about 50 people and generates annual revenues exceeding $25 million with EBITDA in the $5-million range. Calian CEO Patrick Houston said the firm has carved out a valuable niche serving Arctic locations not covered by traditional high-speed networks.

"I think there's a big opportunity here," Houston said. "All of these customers are going to require some sort of communications up there, and satellite is usually your kind of default communications."

Galaxy works with partners such as Eutelsat to provide high-speed internet and other communications services via low-Earth-orbit satellite networks. As new seaports, armed forces bases, and other infrastructure are expected to be built to protect Canada's northern borders in coming years, LEO satellite services "will play a huge part in that," Houston said.

Houston hopes to double Galaxy's revenues over the next few years as rising defence spending, especially in the Arctic, fuels demand for the company's services. The acquisition is the latest move by Calian to bolster its growing defence business as the federal government has pledged to boost defence spending from two per cent of GDP today to five per cent by 2035.