Valuation of SATCO: how much are simulation companies worth?

The St Paul Pioneer Press report that UBG Financial Corp. of Atlanta plans to invest $300 million for a 25 percent stake in Spiral Aviation Training Co., valuing the company at $1.2 billion.

However, the paper comments: “As for Spiral Aviation, if it is worth more than $1 billion, it would mark a meteoric rise.” Market leader CAE Inc. of Montreal apparently has 85% of the worldwide civil aviation flight simulation market, with sales of about $810 million last year. (CAEs quarterly report for December 2004 claims 247,430,149 common shares outstanding; at a current price of around C$5.41 this suggests their market cap is C$1.3bn – about $1.1bn).

According to the paper, Spiral Aviation Training is a nine-person firm, which hasnt made its annual sales public, and its value of $1.2 billion is questioned by others in the industry. The story is attracting attention because the entrepreneur behind Satco is currently trying to buy a US sports team.

Leave a Reply

Your email address will not be published. Required fields are marked *