Irish cable firm posts profit of $14.6m
Published 02/12/2016 | 02:30
Hibernia NGS, the Irish company behind a fibre-optic cable that connects Ireland with the US and the UK, generated a $14.6m (€13.7m) pre-tax profit in the nine months to the end of September, according to filings with the US Securities and Exchange Commission.
Earlier this month it was announced that the company was being acquired by US-based GTT for almost $600m (€564m).
Hibernia was founded by US lawyer and investor Ken Petersen in 2003, when he bought a transatlantic cable for just $17m from bankrupt 360Networks. It had spent $800m laying the cable.
In 2004, Mr Petersen founded Irish company Magnet Networks, which is a subsidiary of his US-based Colombia Ventures Corporation (CVC).
CVC also has investments in an Australian mobile telecommunications firm, as well as biomedical and property businesses.
In 2015, Hibernia connected its flagship Express cable via a spur to a landing station in Cork.
The Express cable is a 4,600km trans-Atlantic cable that links Nova Scotia and the UK.
It has been primarily designed for use by companies working in the financial sector, giving them access to a super-fast cable to facilitate high-speed transactions.
It went into operation in September last year.
The $220m Hibernia Express cable was the first transatlantic cable to be laid in 12 years, following a glut of cables that were laid during the tech boom.
The nine-month accounts for Hibernia NGS show that it generated revenue of $138.6m in the nine months to the end of September. Its network operating expenses hit $52.1m, while it incurred an $11m interest expense in the period.
The company has long-term debt totalling $119m, with the bulk of that not falling due until after 2020.
In May, Hibernia NGS refinanced its debt, extinguishing a facility with Fortress Credit Corporation.
It then entered into a senior secured term loan agreement with a consortium of banks for an aggregate amount of up to $165m.
GTT is to acquire Hibernia NGS by paying $515m in cash and $75m in stock.
It said the purchase would expand GTT's cloud-networking portfolio, composed of wide-area networking, internet, and managed and voice services.
It said it would also add to its client base, adding "marquee clients" with depth in the financial services, media and entertainment, web-centric and service provider sectors.