Announces plan to acquire the pan-European Global Voice networks group
Singapore, ASIA – 15 July 2003 – Mainboard-listed Horizon Education and Technologies Limited (‘Horizon’) today announced that it has entered into a conditional agreement to acquire the Global Voice Networks group (‘GVN’), a pan-European contingency and info-communications group that operates over its own high-quality fibre optic networks in key European cities.
In a transaction that values the GVN group at US$85 million, Horizon is acquiring GVN s business and all its assets, which were originally built at a cost in excess of US$450 million. The purchase price is based on a recent valuation of GVN s business by the PA Consulting Group, using a discounted cash flow (DCF) model.
Horizon will effectively acquire all the shares of GVN s European holding company. The acquisition will be primarily through the issue of 1,663,875,000 new shares at S$0.08 per share. This will result in a reverse takeover of Horizon and will see the shareholders of GVN collectively owning approximately 80.9% of Horizon s expanded share capital.
GVN s business addresses the fast-growing business continuity market, which is driving the need for disaster recovery services and online data storage. As an indication, industry analysts IDC have forecast that the worldwide disk storage market is expected to grow at a compound annual rate of 12% to reach US$53 billion by 2004. This growth will be driven by online storage, which IDC predicts will increase from 17% of the total storage market in 1999 to 67% in 2004.
The rapid growth in the business continuity market in GVN s main target industry sectors of banking & insurance, pharmaceutical and government, is being driven by regulatory requirements which demand data security, data recoverability and guaranteed delivery. Regulators have imposed these requirements due to the growing dependence by companies on their IT systems. An additional catalyst for non-regulated companies is the increasing need for corporate security in a more uncertain world.
GVN s unique competitive position is based on:
GVN s European city networks are strategically located in Amsterdam, Rotterdam, The Hague, Utrecht, Dublin, Berlin, Frankfurt, Munich, Hamburg, Dussledorf, Cologne, Stuttgart and Hanover. In addition, GVN has a purchase option to acquire a fibre optic network in London.
To further strengthen its market position, GVN has a strategic partnership with Hewlett-Packard (HP), whereby GVN is a provider of access services to HP s customers, located in HP s European outsourcing centre in Dublin, Ireland and HP s sales force sells GVN s services to its customer base in Europe.
The transaction is subject to the usual conditions, including due diligence, SGX-ST approval in principle, approval by Horizon shareholders at an EGM, and Singapore s Securities Industry Council waiving the requirement for the vendors of GVN to make a mandatory general offer for all Horizon shares (as their shareholding will exceed the 30% takeover threshold).
Horizon has secured its relationship with GVN through the effective acquisition of a 10% shareholding via a convertible loan arrangement. The loan, which is secured over GVN s assets, is convertible at Horizon s option at any time within 12 months or upon completion of the entire exercise and is for a total of US$4 million (of which the first tranche of US$2 million has been extended).
Horizon s Executive Chairman, Lt-Gen (Ret) Ng Jui Ping, said: ‘Our existing Asian-focused education and IT-based businesses are sound, with long term potential. However, Horizon would need to continue to seek its growth in highly-competitive Asian markets, off a comparatively small capital base.
‘By seizing this opportunity, Horizon will take a quantum leap forward in terms of scale and market capitalization. It will take a leadership position in a fast growing business sector in the technologically advanced and stable European markets.
‘The Directors hold the view that shareholder value will be enhanced through this transaction and new business direction and that it will likely result in the Company appearing on the radar screen of institutional investors.’
GVN s Chief Executive Officer, Mr Noel Meaney, said there were several reasons why the reverse takeover of Horizon represented a very good deal for GVN.
‘Firstly, GVN has been for some time interested in a public listing to gain access to the equity markets for capital to support our growth plans. A reverse takeover instead of an initial public offering (‘IPO’) saves valuable time in taking the company to the market. Accordingly, Horizon is an ideal choice for us: its shares are very well traded in Singapore and it has a very high-quality, industry-aware board of Directors, with whom we share similar industry experience and the desire to make the Company successful.
‘Secondly, GVN wants a footprint in Asia for the next step of its expansion and Horizon s business knowledge and relationships in this region will provide a good platform for future growth.
‘Thirdly, Singapore is an excellent place to list and financially headquarter our business. The Government is business-friendly and keen to promote Singapore as an info-communications hub for high-value IT services such as data storage, disaster recovery, content delivery and VoIP which obviously is very much in line with our own business approach.’
Mr Meaney also said it was interesting to note that Ireland, where GVN has its European headquarters, has adopted a very similar approach to Singapore in enticing info-communications and high value IT service providers. Indeed, the two countries signed an agreement last year to work together to promote e-commerce.
About Horizon Education & Technologies Limited
Horizon was established in 1995 and listed on the Singapore Exchange in January 2000, with its headquarters in Singapore. The Group is a leading education and technology company with two business divisions: Education/ICET and IT based businesses.
Horizon’s Education/ICET division provides educational solutions to customers in the K-12, Tertiary, Corporate Training markets. Related companies include Horizon Educom, Horizon PlanetIQ, Horizon bBand, Horizon Education Group, Knowledge Alive (joint venture between ST Electronics and Horizon), International Centre for Early Childhood, Horizon Knowledge Solutions (formerly known as Postkid.com) and a joint venture with Nasional Montessori. Horizon’s IT based businesses provide IT outsourcing solutions, management support systems and integration of ERP systems for Town Councils in Singapore. Through the development of customised education, Education/ICET and IT based products and services; Horizon plans to expand throughout the Asia Pacific.
About Global Voice Networks (GVN)
GVN is a pan-European service provider of secure on-line contingency based services, including disaster recovery, IT out-sourcing, storage on-demand, content delivery networks (CDN), Virtual Private Networks (VPN s) and Voice over Internet Protocol (VoIP) to enterprise customers across Europe.
GVN delivers its services to its clients over highly secure fibre optic networks that it owns and operates in thirteen (13) cities across Europe including Amsterdam, Rotterdam, The Hague and Utrecht in Holland, Dublin in Ireland and Berlin, Frankfort, Munich, Hamburg, Dussledorf, Cologne, Stuttgart and Hanover in Germany along with 1 (one) duct on the entire German National Development Ring (‘GND Ring’). In addition GVN owns eight (8 STM 1 s) high bandwidth international circuits that uses to connect its European cities to each other.
GVN acquired its city fibre network assets and STM1 s from Metromedia Fibre Networks Inc. (MFN). The assets are recognized as world class end-to-end fiber networks built to exacting standards at an aggregate cost in excess of US$500 million.and acquired by GVN at a deep discount to build cost. MFN Inc was incorporated in 1993 and was listed on NASDAQ in 1997 and built 30 metropolitian fiber networks in the United States and 15 metropolitan fiber networks in Europe before filing voluntary petitions for reorganizations under Chapter 11 of the United States Bankruptcy Code in May 2002. MFN has recently announced that it is planning to emerge from Chapter 11 in August 2003.
Media Contact: Nora Cheng, Waterbrooks Consultants Pte Ltd. (65) 9634 7450 email@example.com
Analyst Contact: Ng Tian Khean, Horizon Education & Technologies Limited +65 6357 6463, Mobile: +65 9678 5092 firstname.lastname@example.org
euNetworks is a bandwidth infrastructure company, owning and operating 17 fibre based metropolitan networks connected with a high capacity intercity backbone covering 51 cities in 15 countries. The company leads the market in data centre connectivity, directly connecting over 430 today. euNetworks is also a leading cloud connectivity provider, directly connecting to all key cloud platforms with access to additional platforms. The company offers a targeted portfolio of metropolitan and long haul services including Dark Fibre, Wavelengths, and Ethernet. Wholesale, finance, content, media, data centre and enterprise customers benefit from euNetworks’ unique inventory of fibre and duct based assets that are tailored to fulfil their high bandwidth needs.