Deutsche Telekom to buy GTS Central Europe

Deutsche Telekom (DT) says it will acquire fellow service provider GTS Central Europe for a total consideration of €546 million ($731 million). The German operator says the acquisition enhances its ability to provide pan-European cross-border telecommunications services. Its existing mobile-centric national companies in the Czech Republic and Poland will also benefit from the added fixed-line infrastructure, enabling them to offer integrated service packages in those countries, DT asserts.

"We are investing against the trend,” said Timotheus Höttges, chief financial officer at Deutsche Telekom. "GTS is a further element for developing our integrated market position comprising mobile and fixed-line network services. Strengthening our position with business customers is also a core element of our strategy."

GTS is one of the top infrastructure-based telecommunications service providers in Central and Eastern Europe. The company has extensive network and data center infrastructure, as well as a portfolio of services focused on business customers (see "GTS jumps to 100G in Central and Eastern Europe via Ciena"). In 2012, GTS achieved revenues of €347 million and EBITDA of €87 million pro-forma, excluding the Slovak assets, which will be retained by the sellers as part of the transaction.

Deutsche Telekom is acquiring GTS from a consortium of international private equity firms, including Columbia Capital, HarbourVest Partners, Innova Capital, and M/C Partners, who have actively developed the company over the last six years. GTS's existing and prospective customers will benefit greatly from the backing by Deutsche Telekom, the two companies assert, including its far-reaching European and global network, access to fixed and mobile services, and its financial resources. Complete business continuity for all customers will be ensured, they add.

"We see Deutsche Telekom as the best partner for GTS and are excited about the benefits and opportunities this will create for our customers and employees," said Danny Bottoms, CEO of GTS.

The transaction is subject to regulatory approvals.

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