The purchase includes: a cash payment of 25 million euro (subject to adjustment), a 2 million euro principal payment on an existing intercompany loan, as well as an assumption of certain financial guarantees. LambdaNet will retain the 7.8 million euro balance of the intercompany loan payable to 3U Holding AG. LambdaNet is expected to have long-term capital leases of 10 million euro at closing. Company officials expect the acquisition to strengthen euNetworks’ position in the market, particularly in Germany.
LambdaNet’s service portfolio includes: Ethernet-, wavelength-, collocation-, and Internet Protocol (IP)-based data and other transmission services 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 centers across Germany. LambdaNet’s audited financial results for 2010 reveal that the business generated total revenues of 36.8 million euro and EBITDA of 9.7 million euro in the financial year ended 31 December 2010.
“This is a transformational acquisition for our business,” says 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.
“There is a strong complementary fit between our business and that of LambdaNet,” Rafuse adds. “LambdaNet has a strong product portfolio and a committed customer base who will benefit from the euNetworks fiber-based network infrastructure that is now available to them in 13 cities across Western Europe. Our market proposition becomes even more compelling and competitive. Our potential for further network development and value creation grows with this acquisition.
“We see a number of opportunities to create value from the combined companies. These cover areas such as revenue growth, reducing network expense, and leveraging our combined backbone networks,” Rafuse continues. “Following the closing of this transaction we will work quickly to integrate and achieve the anticipated synergies.”
The acquisition is expected to close on 31 May 2011.