Dundalk's Digiweb sells Viatel to US firm for €95m
Irish telecoms firm Viatel, a subsidiary of Digiweb, has been sold to US firm Zayo for €95m in cash.
Colorado-based Zayo is only buying the non-Irish interests of Viatel, meaning neither Digiweb, which operates a consumer broadband brand here, nor Viatel's Irish operations, are part of the sale.
Digiweb, founded by entrepreneur Colm Piercy, merged with Viatel, which was previously based in London, in 2013. The combined entity had revenues at the time of €60m and was generating €8m in annual profits.
In the prior year as a standalone entity, Digiweb had generated revenue of €38m and a pre-tax profit of €7m. Mr Piercy is chief executive of Viatel. Two related companies are registered in the Bermuda and the Cayman Islands.
Viatel operates connectivity across Europe for larger companies, public sector clients, and wholesale and carrier customers.
It has metro fibre and data centres in Dublin, London, Amsterdam, Frankfurt, Dusseldorf, Paris, Zurich and other cities. It also owns over 8,400km of duct and fibre optic network infrastructure connecting 35 primary cities and 150 data centres. It's the preferred connectivity partner of the London Stock Exchange.
Viatel is backed by Proventus Captial Partners, which is owned by Swedish businessman Robert Weil. Other backers include Quay Ventures and Morgan Stanley. Quay Ventures is controlled by Brian Kelly and invested in Digiweb in 2012.
Expansion of the Viatel business in Ireland will continue under Digiweb ownership. Digiweb has acquired 10 companies over the past few years. It said that further acquisitions are expected in the coming year to position Viatel as a leading enterprise ICT provider in Ireland.
Mr Piercy said that the sale of the Viatel assets provides an "excellent fit for the European infrastructure business to be part of a wider, fast-growing, listed entity that will develop the business further".
Listed on the New York Stock Exchange, Zayo provides bandwidth infrastructure services to businesses. Customers include wireless carriers, media and content companies and finance, healthcare and other large firms. It has a large fibre network across the US and Europe.
Yesterday, Zayo reported third quarter revenue of $366.8m, which was up 5pc year-on-year. Adjusted earnings before interest, tax, depreciation and amortisation was $215.4m, which was 9pc higher year-on-year. It made a $15.2m net loss for the period, compared to net income of $5.1m in the previous quarter. It made a $110.5m net loss in the corresponding quarter last year.
Its shares fell over 6pc at one stage yesterday. It has a market capitalisation of about $6bn (€5.6bn).
Zayo hailed the planned acquisition of Viatel as "transformative".
"This transformative acquisition cements Zayo as a leading pan-European infrastructure provider and positions Zayo to capture significant organic and inorganic growth in Europe and beyond," according to Karl Maier, president of Zayo International.
As of September 30, the Zayo had $345.7m of cash and $440.8m available under its revolving credit facility.