In an article on Bloomberg, Pacific telecom and undersea-cable operator Pacnet made some noise. As noted on this blog, Pacnet has been increasingly aggressive lately and has been rumored to be on the M&A trail with a bid for AAPT. It turns out that the interest there was real, CEO Bill Barney admitted strong interest in buying the company, although he said no bid had been made.
Barney went further though, with this bit from the Bloomberg article:
“We’ve been looking at acquisitions not only in Australia, but also in Japan, China and India,” Barney said. “We call them players in the content delivery space and we’ve been quite active in the last few weeks.” Pacnet’s acquisition targets include two listed companies, the executive said, declining to identify them.
Wow. Pacnet wants to buy a CDN? That's actually pretty surprising to me, because I just don't see the synergies. But hey, if the man wants a CDN and he has the money, I'm game. So who could he buy? Dan Rayburn points to the obvious candidates: Asian CDN powers CDNetworks and ChinaCache. While those surely are the cream of the crop and I'm sure Barney would love to run them, I actually doubt that Pacnet could pull off a buyout of either one. Neither CDN needs to sell, they would be fairly expensive. If Pacnet were to make a move, I think it would be for a smaller, more desperate CDN with a presence in the region - although I don't actually have anyone in mind, yet.
Pacnet also delayed its rumored IPO plans for a year. No surprise there, this ranks amongst the worst conditions I have ever seen for a telecom IPO. The private equity behind Pacnet wants liquidity badly I'm sure, but they're not crazy. And that leads me to believe that Pacnet's vocal M&A plans may be more bluster than hunger, with an aim to raising the company's profile with a little bravado while the rest of the sector is running scared. Or maybe not, all they have to do to prove me wrong is buy something! 🙂
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