Reports including this one from Bloomberg have Pacnet up for sale with a nominal $1B price tag. It's not the first time that the company's private equity owners have sought an exit of course. The last time there were public rumors was when PT Telkom's rumored bid fell through just before former CEO Bill Barney got sacked. But that's in the past, and Carl Grivner has been running things for a couple years now. So who might do the buying?
Pacnet's main assets have always been its submarine cable systems. But over the past two years, it has been repositioning itself to focus on cloud connectivity and its unique foothold in mainland China. Reports have their 2013 revenues at $472M and EBITDA at $115M, so a $1B enterprise value would correspond to a multiple of just under 9xEBITDA. I rather doubt they can get quite that much unless a bidding war erupts, but who knows.
The Bloomberg report mentions China's CITIC Telecom as a possible buyer, and Chinese interest certainly wouldn't surprise me. A few years even further back there was actually a strong rumor that China Telecom might buy the company, and of course China Netcom owned the assets once already before that when they were called Asia Netcom. Citic is also supposedly looking at Reliance's Global Cloud Xchange assets, which have also had trouble finding bids in recent years.
Chinese interest could prompt competitive bids from the large providers in rival regional markets. A Japanese carrier is always possible, but so are one or more from the Singapore/Malaysia/Indonesia region.
Interest from elsewhere in the world seems unlikely to want to spend a billion dollars in the Far East at present. Level 3 is going to be busy with tw telecom, Vodafone is busy buying up cable assets in Europe, Softbank/Sprint is trying to buy T-Mobile, AT&T is buying DirecTV, and Verizon isn't looking in this direction.
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