13D Filing: Edenbrook Capital, Llc and Digitalglobe Inc. (NYSE:DGI)

Mr. Jeffrey R. Tarr

President and Chief Executive Officer

DigitalGlobe, Inc.

1300 W. 120^th Ave

Westminster, CO 80234

Dear Jeff:

Edenbrook Capital, LLC currently owns 260,125 shares of DigitalGlobe, Inc. (the “Company” or “DGI”), representing approximately 0.4% of the outstanding common stock of the Company. While our ownership stake in DGI is not significant as a percentage of the total size of the Company, this position is a meaningful portion of our assets under management. As such, on behalf of our investors, we feel compelled to declare our belief that the recently announced acquisition of the Issuer by Macdonald, Dettwiler and Associates Ltd. (“MDA”) significantly undervalues DGI’s business, based on meaningfully higher trading and transaction multiples for comparable companies.

We have been shareholders in DGI for over five years. During that time, we have seen the Company go through a dramatic transformation, fueled by what we view as operational excellence. During this period the Company:

1)	Executed significant margin expansion, from 38% in 2012 to 52% in 2016

2)	Acquired and successfully integrated its largest competitor, GeoEye

3)	Substantially grew the portion of revenue that is recurring

4)	Transitioned from a cash user to a substantial cash generator, and lowered the capital intensity of the business to be able to sustain cash generation going forward

5)	Widened the Company’s competitive moat meaningfully, by launching WorldView-3 and WorldView-4, the industry’s leading high resolution earth imaging satellites, and by greatly expanding the Company’s image library, a competitive advantage that grows daily

6)	Opportunistically repurchased approximately 20% of the Company, one of several shareholder friendly initiatives that also included multiple open-market purchases of stock by several members of the management team and the board of directors

Further, the Company achieved all of this during a period of declining defense budgets, the largest end market for the Company’s geospatial imaging services. Now with defense budgets poised to expand for the first time in many years, we believe that the Company could achieve further financial improvement.