Combination positions euNetworks to deliver bandwidth infrastructure to a broader German market with scale advantages. Transaction creates value, with increased addressable market and top line growth. Customers to benefit from the combined product set across a broader geography.
London, UNITED KINGDOM – 19 May 2011 euNetworks GmbH, a subsidiary of euNetworks Group Limited, announced today that it has reached a definitive agreement to acquire German based LambdaNet Communications Deutschland AG, a 100% subsidiary of the listed company 3U HOLDING AG. The purchase price is a cash payment of €25m (subject to adjustment) plus a payment of principal of €2m on an existing intercompany loan as well as an assumption of certain financial guarantees. LambdaNet will retain the balance of the intercompany loan payable to 3U HOLDING AG of €7.8m. Additionally LambdaNet is expected to have long term capital leases of €10m at closing. The acquisition will significantly strengthen euNetworks’ position in the market, particularly in Germany.
LambdaNet’s service portfolio includes Ethernet, Wavelength, Colocation, Internet Protocol (IP) based data services and other transmission services. These are delivered to both carriers and enterprises, primarily throughout Germany. LambdaNet operates in Germany and has network and subsidiaries in the Czech Republic and Austria. The business offers services out of 25 data centres across Germany. According to LambdaNet’s audited financial results for 2010, the business generated total revenues of €36.8m and EBITDA of €9.7m in the financial year ended 31 December 2010.
“This is a transformational acquisition for our business,” said Brady Rafuse, Chief Executive Officer at euNetworks. “Combining LambdaNet with the current euNetworks business will bring us much greater scale to our core German business, as well as adding great customers, people and assets. Over the last 18 months we have been focused on implementing our operational model and delivering strong organic growth. We have however always believed that there is great inorganic growth potential in the market as well. We intend to actively participate in market consolidation where appropriate, and have highly motivated investors supporting us in this activity.”
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