Global Crossing Acquiring Impsat
FLORHAM PARK, N.J., Oct. 26, 2006 -- IP-based network provider Global Crossing Ltd. announced today that it will acquire telecommunications company Impsat Fiber Networks Inc. of Argentina in a cash and stock deal worth approximately $336 million.
Global Crossing said it will pay $9.32 in cash for each share of Impsat common stock, for a total of $95 million. The company will also assume approximately $241 million in Impsat debt.
Impsat provides private telecommunications network and Internet services in Latin America; it owns and operates 15 metropolitan area networks and 15 advanced hosting centers there. Impsat currently provides services to more than 4500 national and multinational clients, and has operations in Argentina, Colombia, Brazil, Venezuela, Ecuador, Chile, Peru and the US.
"Impsat expands our presence in Latin America, which is an area where industry analysts see demand for global IP services growing at more than average rates. Along with (Global Crossing's recent acquisition) Fibernet in the UK and our organic growth there as well as in North America, the acquisition of Impsat creates a third region of critical mass for Global Crossing. With Impsat’s deep network, customer scale and a sales force with well-developed relationships, Global Crossing will be able to leverage their growing success in the region," Global Crossing CEO John Legere said during a conference call this morning to discuss the acquisition.
Global Crossing expects the acquisition to contribute annual revenue of more than $270 million, and to yield annual adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of more than $70 million after the company is fully integrated into its operations. Global Crossing said it expects to save more than $10 million a year in operational expenses after the integration, which is expected to take 12 to 18 months after the closing and cost approximately $10 million.
Global Crossing and Impsat have had a commercial relationship since 2000, when Global Crossing selected Impsat as one of its providers of Point of Presence (PoP) facilities for Global Crossing's Latin American network, known as South American Crossing. Impsat has also been a customer of Global Crossing in Latin America since 2000 and currently buys most of its subsea network from Global Crossing.
"I believe combining our companies will enhance the solutions we provide customers, create economies of scale and further serve the economic development objectives of the Latin American region," said Ricardo Verdaguer, Impsat CEO.
The transaction, subject to the approval of Impsat's shareholders, regulatory approvals from the US, Venezuela and Brazil and other customary conditions, is expected to close in the first quarter of 2007.
For more information, visit: www.globalcrossing.com
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