According to reports, Deutsche Telekom has indeed agreed to buy GTS Central Europe, or at least most of it, giving it a deeper fiber footprint throughout eastern Europe. The price tag was €546M doesn't include the company's Slovakian assets, which will apparently remain in the hands of the company's private equity owners for now, but those in Poland, the Czech Republic, Hungary, Romania, and the rest will go to the German incumbent.
Since May, GTS Central Europe had been the subject of M&A rumors, but just last month the sale was supposedly taken off the table. In hindsight, it seems that GTS and its backers called DT's bluff when the German giant didn't meet its price, and DT indeed came back with a better offer.
Excluding the Slovakian assets, GTS generated €348M in revenues and €87M in EBITDA, which works out to a 6.27 multiple. GTS claims an extensive metro and fixed wireless footprint across the region, hooking up more than 14,000 buildings in one form or another.
Level 3 and Netia had also been in the game at various points, but DT was perhaps the most logical and well funded acquirer if in fact they were interested - as it turns out they were. I wonder how their renewed push east will work its way out in the marketplace.
Might this sale prompt Euro M&A to kick up into a higher gear now? They have been remarkably patient across the Atlantic, but there are quite a few assets that could easily be put into play if things gain some momentum.
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