An international telco formed in Ireland by former Metromedia boss Noel Meaney has acquired the assets of a major intercity fibre optic network across Europe in a cash deal valued at €25m. The network was originally built at a cost of €1.2bn.
Global Voice (GV), which is listed on the Singapore stock exchange and owns Metromedia’s former data centre in Dublin as well as the company’s former fibre assets across Europe, has entered into a memorandum of understanding with Bermuda-based Viatel Holding, which owns the intercity network.
The acquisition will make GV the owner and operator of one of the largest and most technically advanced fibre optic and metropolitan intercity networks in Europe. The network covers France, Belgium, Holland, Switzerland and the UK across 6,800 kilometres and was built at the cost of €1.2bn.
It includes two undersea cross-channel cables linking continental Europe with the UK and adds a client base that generates recurring revenues of around €2.6m a year.
The acquisition will take the form of a 100-year lease of Viatel’s infrastructure assets at a nominal rent, with an option to acquire ownership of the assets for a nominal sum following the lease commencement.
GV will bear no operating costs for two years and after that such costs will be capped at €7m a year with both companies working to reduce this cost over two years.
GV will pay cash consideration of €25m and will give Viatel five fibre pairs in seven of the cities covered by GV. It will also give Viatel preferential pricing for access to its metropolitan networks.
GV has appointed CIMB-GK Securities as its financial adviser for the transaction.
“From a strategic perspective the acquisition is superb,” explained GV chief executive and founder Noel Meaney.
“It uniquely combines GV’s dense last-mile metropolitan networks and Viatel’s intercity networks into one powerful end-to-end fibre network connecting most of Europe’s largest and most industrialist cities.”
He added that it will immediately allow GV’s existing customers to extend their fibre usage and business continuity services without any third-party dependence and allow the company to add new broadband products.
The deputy chairman of GV, Christopher Nightingale, added that the deal will enhance GV’s profitability and revenue as a result of the new customers and also the opportunities an expanded network will bring.
Meaney acquired the former assets of Metromedia after leading a management buyout. Prior to the buyout by GV, Metromedia had spent €650m deploying data centres and fibre infrastructure across various European cities including Dublin. Before its parent firm fell into financial difficulties, Metromedia was close to completing a US$110m investment in Ireland, consisting of a US$75m data centre and a US$45m fibre ring that stretched for 100km around Dublin City.
Meaney’s GV listed on the Singapore stock exchange in October 2004 through a reverse takeover of Horizon Education and Technologies. Early last year, GV achieved revenues of €20.4m and surpassed forecast revenues by more than 15pc.
The company now has fibre networks across 14 European cities, which provide access to key locations within a city including business and industrial parks, educational centres, financial centres, government buildings and internet exchanges. In a separate venture soon to be entitled International Data Centres, Meaney owns the former Metromedia data centre in Citywest Business Campus, over half of which is leased by Hewlett-Packard for its outsourcing business and is at full capacity (customers include Bank of Ireland and Google).
By John Kennedy