Gilat Satellite Networks raises $100m via convertible notes

The Israel-listed satellite networking firm priced five-year notes at 3.75%, with proceeds targeting multi-orbit and space-technology investments.

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Gilat Satellite Networks has secured $100 million through a private placement of convertible notes, with the transaction expected to close on 1 September 2026. The five-year senior unsecured notes carry a coupon of 3.75% per annum and were placed exclusively with Israeli institutional investors under Regulation S of the US Securities Act, meaning the offering is not open to US persons during a 40-day distribution compliance period.

The conversion price is set at $16.00 per ordinary share, a premium of approximately 60% above the last reported Nasdaq sale price of $9.94 on 28 August 2026. Gilat retains the right to force conversion if the share price equals or exceeds $20.00 for ten consecutive trading days on or after 1 September 2027. A step-up mechanism is built in: if the share price does not average at least $15.00 over any consecutive 30-day period ending 18 months after issuance, the interest rate increases by 1.25 percentage points. The notes mature on 1 September 2031.

Use of proceeds

Gilat said the net proceeds will be directed at general corporate purposes, with a specific focus on next-generation satellite and space technologies, multi-orbit connectivity, advanced ground systems, mobility and defence capabilities. Chief executive Adi Sfadia said the funding "enhances our ability to invest organically, expand our technology portfolio and pursue opportunities that can broaden our capabilities and addressable markets." The company did not name specific programmes, acquisition targets or partnership arrangements tied to the raise.

The company's subsidiary network includes Gilat Wavestream, Gilat DataPath and Gilat Stellar Blu, covering amplifiers, ground systems and electronically steered antennas. Its customer base spans government and defence, in-flight connectivity, cellular backhaul and critical infrastructure.

Market context

The satellite ground-segment market is undergoing rapid structural change as low-Earth-orbit constellations from operators including SpaceX's Starlink, Amazon's Project Kuiper and Eutelsat OneWeb drive demand for multi-orbit-compatible terminals and software-defined ground infrastructure. Established vendors such as Gilat, ViaSat and Hughes Network Systems are competing with a growing cohort of well-funded startups targeting electronically steered antennas and cloud-native network management.

Defence applications are a particular growth vector: NATO member nations and allied partners have accelerated procurement of resilient, satellite-based communications following the conflict in Ukraine, which demonstrated the tactical value of LEO connectivity. Gilat's Israeli domicile and existing defence division give it established government relationships, though the company's annual report acknowledges risks arising from regional military conflicts and geopolitical instability.

The convertible-note structure, with its 60% conversion premium and no financial maintenance covenants, suggests Gilat's management expects meaningful share-price appreciation if its technology investments gain traction. For institutional investors, the step-up interest clause provides a measure of downside protection if equity performance disappoints over the first 18 months. Gilat has committed to file a resale registration statement with the SEC within 12 months of closing, which will give the underlying ordinary shares greater secondary-market liquidity.

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