Telstra $697m acquisition of Pacnet goes ahead

Australian telco giant Telsta has confirmed it is proceeding with the acquisition of trans-Pacific cable and data centre player Pacnet. As ever the $697 million deal is subject to regulatory approval, but assuming it goes through it will give Telstra a foothold in China, a bunch of data centres and services including SDN (software defined networking).

“Asia is an important part of our growth strategy,” said Telstra CEO David Thodey. “We believe this acquisition will help us become a leading provider of enterprise services to multinational companies and carriers in the region.

“The enterprise services market is evolving rapidly and Pacnet will strengthen our networks; data centres and submarine network as well as boosting our service offerings and people capabilities. For Australian businesses, businesses across Asia and importantly companies looking to expand and grow in Asia, the combined entity will provide powerful new options for networks and services.

“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.

“Our strategy is centred on serving enterprise and carrier customers doing business in Asia. We serve these customers by leveraging our strong connectivity foundation to offer a portfolio of integrated network applications and services solutions.”

Pacnet had revenues of $472 in 2013, so Telsta seems to be getting a bit of a bargain with this deal, especially since it had previously been reported that the owners were looking for closer to a billion. Assuming it all goes through Telsta will have significantly enhanced its APAC presence without having to break the bank.