Deutsche Telekom buys GTS for €546m

The CEE telecom infra business is currently owned by a consortium of private equity firms including Columbia Capital, MC Partners and HarbourVest.

Deutsche Telekom has closed its acquisition of GTS Central Europe, in a deal that provides the German telecom operator with a fibre optic and infrastructure business in Eastern Europe.

The company is being sold by a consortium of private equity firms that includes Bessemer Venture Partners, Columbia Capital, HarbourVest Partners, Innova Capital, MC Partners and Oak Investment Partners.

Based in Warsaw, GTS is a telecom service provider that owns and operate network and data centre infrastructure. Its client base, primarily made of business customers, includes multinationals like Coca-Cola and General Motors.

The €546 million transaction values the business at 6.3 times EBITDA, broadly in line with the industry average of 6 times earnings. GTS reported 2012 revenues of €347 million and EBITDA of €87 million excluding its Slovak assets, which are being retained by the sellers.

GTS serves nearly 38,000 customers from its 26,000-kilometre fibre optic network and 14 data centres in the Czech Republic, Hungary, Poland, Romania and Slovakia.

“The sale allows Deutsche Telekom to enhance its capabilities to offer pan-European telecommunication services as well as integrated products in countries where they currently maintain no adequate fixed access network infrastructure,” said law firm Edwards Wildman, which advised on the transaction, in a statement.

Lead acquirers Columbia Capital and MC Partners initially bought the business in 2008.