Through the deal, London, UK-based BT paid 2.06 per share, valuing BT Infonet at 510m pounds ($965m) inclusive of Infonet’s cash balance of 205m pounds ($390m) at March 31, 2004, or 305m pounds ($575m) excluding the cash balance.
The actual price paid for the company declined slightly from the initial announcement made in November 2004, when BT said it would purchase the company for 520m pounds ($964.5m). At the time, BT said that excluding Infonet’s net cash balance of 210m pounds ($389.5m), the aggregate value of the deal would have been 310m pounds ($575m).
Following closure of the deal, El Segundo, California-based Infonet has now ceased trading on the New York Stock Exchange.
BT believes that eliminating network overlaps and increasing purchasing power in buying extra capacity will result in cash synergies of $150m in the third year following the acquisition.
Infonet’s shareholders includes the largest Dutch telecom operator, Royal KPN, Swedish-Finnish TeliaSonera, Spain’s Telefonica, Swisscom, KDDI Corp of Japan, and Telstra of Australia.
Infonet provides voice and data network services, and in full-year 2004 reduced its net loss by over $150m to $66.6m, while total revenue fell 5% to $622m. Its client base consists of about 1,800 multinational customers including the US government, Nestle, Hewlett-Packard, Siemens, Nokia, IBM, and DHL.
In its most recent third quarter ended December 31, 2004, Infonet reported a net loss of $19m for the third quarter ended December 31, compared to a loss of $20.5m in 2003, on revenue that grew 3% to $156.1m.
