Global Crossing to pay $US96.1m for UK fibre network

Stuart Corner
Saturday, 26 August 2006 02:53

IT Industry - Deals

Global Crossing has announced its first major acquisition since being rescued from near bankruptcy at the end of 2004. The development comes shortly after it announced its second quarter results, hailing them as marking ' marking significant financial milestones."

The company has announced that its subsidiary, GC Acquisitions UK Limited will pay $US96.1 million in cash for Fibernet Group which operates a UK-wide fibre optic network serving large enterprises, telcos and ISPs. Fibernet has more than 100 points of presence in the UK and an additional 12 in Frankfurt, Germany. In the year to August 31, 2005 it reported revenue of £47.9 million ($US91m) EBITDA of £15.9 million ($US31.2m.

Global Crossing says the planned acquisition reflects its strategy to "invest and grow" its business serving multinational enterprises and service providers with innovative IP services. "Global Crossing believes that this transaction will accelerate its development by increasing and diversifying Global Crossing's customer base of 'invest and grow' clients in the United Kingdom through the addition of Fibernet's marquee roster of UK corporate enterprise and carrier customers. Examples of these new customers include the Bank of England, Citigroup, IBM and Carphone Warehouse."

Global Crossing says that it and Fibernet have complementary long haul networks. "This complementary network infrastructure will facilitate the integration, allowing the combined company to offer Global Crossing's broad array of innovative IP- based service offerings to Fibernet's current customer base. It will also result in the creation of a strong market position from which to expand this list of enterprise customers."

Global Crossing one of the highest profile victims of the 2000 'tech wreck' filed for Chapter 11 in 2003 with $US11 billion in debt. After a tough battle from potential buyers it was rescued by Singapore Technologies Telemedia which paid a mere $US250 million for 61.5 percent of the company; secured creditors got the rest. The company emerged from chapter 11 at the end of 2003 with its global network largely intact and with $US3.0 billion in annual revenues, and it has not looked back since.

Global Crossing claims to operate the world's first integrated global IP-based network. Its core network connects more than 300 cities in 28 countries an delivers services to more than 600 cities in 60 countries The company offers a full range of managed data and voice products including Global Crossing IP VPN Service, Global Crossing Managed Services and Global Crossing VoIP services, to 36 percent of the Fortune 500, as well as 700 carriers, mobile operators and ISPs.