Acquisitions and disposals
prior to the 2007
financial year
The BT of today was largely created
by a radical restructuring of the company in the 2002 financial year. This restructuring
involved the UK’s largest-ever rights issue (raising £5.9 billion),
the demerger of O2 (comprising BT’s wholly owned mobile assets in Europe),
the disposal of significant non-core businesses and assets, the unwinding of Concert
(our joint venture with AT&T) and the creation of customer-focused lines of
business.
Our principal acquisition in the 2005 financial year was Infonet, one of the world’s leading providers of international managed voice and data network services, for £520 million, including acquisition costs. Excluding Infonet’s net cash balance, the net value of the deal was £315 million. We also acquired the 74% of
Albacom that we did not already own for a total acquisition cost of £131 million. Albacom (now BT Italia) provides data transmission, voice and internet services to the Italian business communications market.
In the 2006 financial year, we acquired Radianz, the leading financial services extranet provider, from Reuters for a total consideration of £143 million. We also acquired Atlanet, a Fiat subsidiary providing domestic telecommunications services to Fiat and other non-Fiat business customers throughout Italy, for
approximately €80 million, further reinforcing our position in the Italian market. During July and September 2005, the conditions enabling BT to redeem the exchangeable bond over our shares in LG Telecom were fulfilled. As a result, virtually all the bondholders exercised their right to convert their bonds into LG
Telecom shares, enabling us to dispose of all our shares. The transaction gave rise to a redemption gain of £27 million.
Acquisitions and disposals in the 2007 financial year
During the 2007 financial year, we completed a number of key transactions:
Date |
|
Acquisition |
|
|
|
April
2006 |
|
We
acquired dabs.com, one of the UK’s leading online retailers
of IT and technology products. |
|
|
|
August
2006 |
|
Tech Mahindra,
a company in which we now own 35% of the issued share capital, was listed
on the Indian national and Bombay stock exchanges, following an IPO (initial
public offering). We received proceeds of £25 million for the sale
of a 6% stake in the IPO. Tech Mahindra, formally Mahindra BT, provides
end-to-end IT services and solutions to the telecoms industry. As at 31
March 2007, Tech Mahindra had a market capitalisation of around £2
billion, valuing BT’s holding at around £700 million. |
|
|
|
October
2006 |
|
We acquired California-based Counterpane Internet Security Inc. (Counterpane), a leading provider
of managed networked security services. Counterpane monitors 550 networks
worldwide for multinational and Fortune 100 customers. |
|
|
|
November
2006 |
|
We made a recommended
cash offer for internet service provider PlusNet plc, offering 210
pence per share, valuing the company at approximately £67 million
net of cash. In January 2007, the offer was declared wholly unconditional,
and PlusNet was de-listed from the Alternative Investment Market in February
2007. Operating since 1997, PlusNet has nearly 200,000 broadband customers. |
|
|
|
February
2007 |
|
We signed a conditional
agreement to acquire i2i Enterprise Pvt Ltd, a Mumbai-based enterprise
services company distributing BT Infonet products and services to major
Indian and multinational companies. i2i is one of the most innovative providers
of enterprise telecommunications services in the fast- growing Indian market. |
|
|
|
March
2007 |
|
We acquired International
Network Services Inc. (INS), a leading global provider of IT consulting
and software solutions, based in California. The company has almost 900
employees in 12 countries and has served 75% of Fortune 500 enterprises. |
|
|
|
March
2007 |
|
We increased our
stake in i.Net from 51% to 65.4% through the purchase of a private
stake and a voluntary public offer, both at a price of €52.30 per share.
i.Net is our Italian hosting and managed security subsidiary, listed on
the Italian stock exchange. |
We also
completed a number of smaller transactions in the 2007 financial year, including:
a joint venture with KDDI to address the growing market for the provision of global
managed network services and global outsourcing services to organisations headquartered
in Japan; a venture with Jubilant Enpro, part of the Jubilant Group, an Indian
conglomerate, to apply for national long-distance and international long-distance
licences in India; and the disposal of our full-time satellite broadcast services
assets to Arqiva.
Post-balance sheet acquisition
In April 2007, we entered into a conditional
agreement to acquire Comsat International – a leading provider of
data communication services for corporations and public sector organisations
in Latin America – through its parent company, CI Holding Corporation.
Comsat International employs more than 700 professionals with in-depth knowledge
of Latin American markets and provides services directly in 15 countries. It
has a track record in the delivery of complex projects and the management of
network solutions for enterprise, public sector and carrier customers.
|
