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Baron Funds Comments on RigNet Inc.

February 26, 2014 | About:

RigNet, Inc. (RNET) a provider of telecommunication services to the oil and gas industry, was up 29% in the quarter. The company benefitted from two events. First, the company announced its intent to acquire Inmarsat's Energy Broadband business. We believe that this acquisition will be highly accretive for RigNet and that RigNet can significantly improve margins in the first couple of years of operations. The second event that benefitted the company was the acquisition by KKR of a 27% stake from Cubera (both KKR and Cubera are private equity firms). The possibility for Cubera to exit via a secondary stock sale had been an overhang on the stock, so this transaction removed that issue.

From Ron Baron (Trades, Portfolio)'s Baron Funds fourth quarter 2013 letter to shareholders.


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