PE investors sell Pacnet to Australia's Telstra for $697m

Headquartered in Singapore and Hong Kong, Pacnet has an integrated network comprising Asia's largest privately-owned submarine cable network with 21 landing stations in China, Hong Kong, Japan, the Philippines, Singapore, South Korea and Taiwan.

It also controls two of the five fiber cable pairs on the Unity trans-Pacific network connecting Japan to the US and has a China joint venture that is licensed to operate domestic internet protocol virtual private networks and provide data center services.

The company has data centers in 17 cities in Asia Pacific, as well as 109 points-of-presence across 61 cities within the region and eight cities in the US and Europe. Pacnet has 815 employees in 25 offices located in 24 cities in 11 countries and regions.

There are about 2,400 enterprise customers with a strong penetration in financial services, the internet, social networking, e-commerce, technology and professional services. Pacnet also targets telecom carrier customers, of which there are 220 in both the retail and wholesale segments.

Revenue for the year ended December 2013 came to $472 million with EBITDA reaching $111 million.

Clearwater, Spinnaker and Ashmore bought the business - then known as Asia Netcom - from China Netcom in 2006 for $402 million. The transaction comprised $169 million for the international services unit and $233 million for the submarine cable network.

David Thodey, CEO of Telstra, said in a statement that the acquisition is a significant step for the company as it looks to expand its business beyond Australia and establish itself as a leading provider of enterprise services to multinational companies and carriers in the region.

"The enterprise services market is evolving rapidly and Pacnet will strengthen our networks; data centers and submarine network as well as boosting our service offerings and people capabilities," he said. "For Australian businesses, businesses across Asia and importantly companies looking to expand and grow in Asia, the combined entity will provide powerful new options for networks and services."

The transaction is subject to regulatory approval and is expected to close by mid-2015.

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• Topics
• Exits
• Technology
• Australasia
• Trade sale
• Clearwater Capital Partners
• Ashmore Investment Management
• TMT
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• Asia
• Australia