Jan, 2002 : European Commission Clears KPNQwest's Acquisition of GTS
📅 - KPNQwest (kpnqwest.com), a pan-European data communicationsand hosting company, announced yesterday that the European Commission hasapproved KPNQwest's acquisition of the Ebone and Central Europe assets ofGlobal TeleSystems Inc (gtsgroup.com). The European Commission decided thatthe acquisition would not lead to the creation or strengthening of adominant position in any relevant telecommunications market.
Commenting on the European Commission's decision, Jack McMaster, presidentand CEO of KPNQwest said, "Today's decision marks a significant milestone inour acquisition of Ebone and GTS Central Europe. It also marks an inflectionpoint in the consolidation of European telecommunications services. At thesame time, it confirms our belief that the combined company will offer acompetitive pan-European set of products and services in the datacommunications and hosting market, which continues to be identified as agrowth area in Europe."
On Oct. 18, KPNQwest announced its intention to acquire the GTS assets in apre-negotiated bankruptcy proceeding for Euro 645 million (net of cash).KPNQwest will issue approximately Euro 210 million in 10-year convertiblenotes to GTS bondholders in exchange for GTS bonds of Euro 1.9 billion andwill assume the GTS credit facility of approximately Euro 210 million andGTS capital leases of approximately Euro 250 million at the date of closing.
GTS will have approximately Euro 25 million in cash at closing. KPNQwest andthe GTS credit facility banks have agreed to replace the current GTSfacility with a Euro 500 million facility (in the aggregate).
After the acquisition, KPNQwest expects pro forma revenues of Euro 1.3 - 1.4billion in 2002, pro forma revenue and earnings before interest, taxes,depreciation and amortization of Euro 175-200 million in 2002. With theincreased EBITDA and credit facility, KPNQwest expects that it is fullyfunded through the time it becomes free cash flow positive in the fourthquarter of 2003.
Commenting on the European Commission's decision, Jack McMaster, presidentand CEO of KPNQwest said, "Today's decision marks a significant milestone inour acquisition of Ebone and GTS Central Europe. It also marks an inflectionpoint in the consolidation of European telecommunications services. At thesame time, it confirms our belief that the combined company will offer acompetitive pan-European set of products and services in the datacommunications and hosting market, which continues to be identified as agrowth area in Europe."
On Oct. 18, KPNQwest announced its intention to acquire the GTS assets in apre-negotiated bankruptcy proceeding for Euro 645 million (net of cash).KPNQwest will issue approximately Euro 210 million in 10-year convertiblenotes to GTS bondholders in exchange for GTS bonds of Euro 1.9 billion andwill assume the GTS credit facility of approximately Euro 210 million andGTS capital leases of approximately Euro 250 million at the date of closing.
GTS will have approximately Euro 25 million in cash at closing. KPNQwest andthe GTS credit facility banks have agreed to replace the current GTSfacility with a Euro 500 million facility (in the aggregate).
After the acquisition, KPNQwest expects pro forma revenues of Euro 1.3 - 1.4billion in 2002, pro forma revenue and earnings before interest, taxes,depreciation and amortization of Euro 175-200 million in 2002. With theincreased EBITDA and credit facility, KPNQwest expects that it is fullyfunded through the time it becomes free cash flow positive in the fourthquarter of 2003.
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URL source: http://www.thewhir.com/marketwatch/gts011702.cfm
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