Contact: Scott Denne
Deutsche Telekom hands over $735m for GTS Central Europe in a deal that brings a geographically unique set of fiber and datacenter assets but little growth. The move plays into DT’s desire to build its B2B offerings that service a set of customers beyond its base of Germany-based multinational corporations.
GTS has both fiber networks and datacenters across multiple countries in Eastern and Central Europe, making it the region’s only multi-country, multi-tenant datacenter business, according to a 451 Research report. That reach is valuable to the German telecom giant because it needs fixed-line networks and datacenters to go along with its wireless-only services in the region, especially in countries such as the Czech Republic and Poland.
GTS’s Slovakia operations, where DT already has fixed-line network assets, are not included in the deal. The portion of the business that is going to DT posted $459m in revenue and EBITDA of $115m last year.
Despite its geographic reach in its home market, GTS hasn’t grown since its acquisition by a consortium of private equity investors in 2008. The year before that transaction, it reported $587m in revenue – a mark it hasn’t hit since, which DT attributes to tight regulations and difficult economic conditions in Europe. Last year, GTS as a whole, including its Slovakia operations, reported $511m in revenue and EBITDA of $136m.
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