Global Crossing has agreed to acquire Impsat for $9.32 in cash for each share of Impsat common stock, representing a total equity value of approximately $95 million, and it will assume, refinance and/or repay Impsat’s debt, which was approximately $241 million as of June 30, 2006. The transaction is expected to close in the first quarter of 2007.
The acquisition of Impsat will accelerate Global Crossing’s strategy to provide converged IP services to enterprises and carriers globally, in addition to enhancing the company’s financials. As a leading Latin American provider of IP, hosting and value-added data solutions, Impsat will add more than 4,500 customers to Global Crossing’s ranks – all of which are supported by a world class sales and customer care team with local presence in seven Latin American countries. Impsat’s extensive IP-based intercity network, 15 metropolitan networks and 15 advanced hosting centers will provide a greater breadth of services and coverage to Global Crossing’s Latin American operations. Impsat will also add scale to the company’s regional presence and will enhance its competitive position as a global service provider to multinational enterprises and carrier customers.
Global Crossing expects the acquisition to contribute annual revenue of more than $270 million, and to yield annual Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) of more than $70 million after operational synergies are fully realized. Annual operational savings after integration are expected to be more than $10 million. Integration of the business is expected to be completed 12 to 18 months after closing of the transaction, at a one-time cost of approximately $10 million.
“The combination of Impsat’s data-centric customer set, extensive Latin American network and managed IP capabilities with Global Crossing’s proven ability to deliver converged IP services on a global scale is a compelling win for the customers of both companies,” said John Legere, Global Crossing’s CEO. “The Impsat acquisition, along with our recently completed acquisition of Fibernet in the UK, demonstrates our strategic and focused participation in industry consolidation. We will aggressively pursue those opportunities that would enhance our core business, expand our service capabilities and improve our financials.”
Global Crossing and Impsat have had a commercial relationship since 2000, when Global Crossing selected Impsat as one of its providers of Point of Presence (PoP) facilities for Global Crossing’s Latin American network, known as South American Crossing. Impsat has also been a customer of Global Crossing in Latin America since 2000. This longstanding relationship means that customers of both companies should enjoy a seamless transition following closing of the transaction.
“This transaction demonstrates the value created by Impsat within the telecommunications industry in Latin America and represents an attractive offer to our shareholders. Our service-oriented employees and portfolio of IP-based products and services mesh perfectly with Global Crossing’s strategy and culture, which emphasize technology, security, customer support and control,” said Ricardo Verdaguer, CEO of Impsat.