Telstra announced today that it will buy Asian undersea cable operator Pacnet for $697 million to boost its expansion in Asia.
In a statement released this morning, Telstra said that the acquisition of Singapore- and Hong Kong-headquartered Pacnet gives Telstra ownership of an extensive range of services including SDN, an expanded data centre network, more submarine cables, and major customers across the region.
The acquisition also includes interests in Pacnet’s China joint venture, PBS, which is licensed to operate a domestic IPVPN and provide data center services in most major provinces in China.
Telstra said the combined entity would become a leader in the Asia service provider market, and the company’s global enterprises and services business in the region would almost double in size.
“Asia is an important part of our growth strategy,” said Telstra CEO David Thodey in the statement. “We believe this acquisition will help us become 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 networks, as well as boosting our service offerings and people capabilities.”
Pacnet increases the scale and scope of Telstra’s assets which can be used as a platform to scale and expand leading solutions such as unified cloud, unified communications, managed network services and security services, said Thodey.
“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,” he added.
For the year 2013, Pacnet generated revenues of $472m and EBITDA of $111m. Pacnet operates 109 PoPs across 61 cities in the Asia-Pacific region and 8 cities outside of the region (US and Europe) aimed at both carrier and enterprise customers.
It operates a network of 29 interconnected data centers in 17 cities across the Asia-Pacific region and has Asia’s largest privately-owned submarine cable network, with 21 cable landing stations in China, Hong Kong, Japan, the Philippines, Singapore, South Korea, and Taiwan.
In addition, Pacnet controls two of the five fiber pairs on the Unity trans-Pacific submarine cable network connecting Japan to the United States.
Pacnet has 2,400 enterprise customers with strong penetration of financial services, internet, social networking players, e-commerce, technology and professional services. In the carrier segment, Pacnet has 220 customers comprising both retail and wholesale telecom operators.
The firm has 815 employees across 25 offices (including PBS China) located in 24 cities in 11 countries and regions.
The deal is subject to regulatory approval and expected to complete by mid-2015.