Telstra to acquire Pacnet

Telstra announced December 23 that it has agreed to buy Asian service provider Pacnet Ltd. for US$697 million. The deal is subject to regulatory and Pacnet financier approvals but is expected to close by the middle of this year.

For the year ended December 2013, Pacnet generated US$472 million in revenues, and earnings before interest, tax, depreciation and amortization (EBITDA) of US$111 million.In addition to Pacnet’s extensive infrastructure, the deal also includes Pacnet's interest in its China joint venture, PBS, which is licensed to operate a domestic IP virtual private network and provide data center services in most major provinces in China.

The acquisition brings Telstra closer to the world of software-defined networking (SDN; see "Pacnet launches SDN-enabled network") as well as an expanded network of data centers and submarine cables and major customers across the region. Pacnet operates 109 points of presence across 61 cities in the Asia-Pacific region and eight cities outside of the region (U.S. and Europe) to serve both carrier and enterprise customers. Pacnet also operates Asia’s largest privately owned submarine network, which lands at 21 cable landing stations in China, Hong Kong, Japan, the Philippines, Singapore, South Korea, and Taiwan. The company also controls two of the five fiber pairs on the Unity trans-Pacific undersea cable network that links Japan to the United States (see "Pacnet upgrades trans-Pacific submarine cable with Ciena").

"Asia is an important part of our growth strategy. We believe this acquisition will help us become a leading provider of enterprise services to multinational companies and carriers in the region," said Telstra CEO David Thodey. "The enterprise services market is evolving rapidly and Pacnet will strengthen our networks; data centers, and submarine network as well as boosting our service offerings and people capabilities.

"Pacnet increases the scale and scope of our assets which can be used as a platform for Telstra to scale and expand leading solutions such as unified cloud, unified communications, managed network services and security services," he added.

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