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Edwards Wildman Advises Shareholders of GTS on Sale to Deutsche Telekom

Deals and Cases

Edwards Wildman has advised GTS on the completion of its sale to Deutsche Telekom for a total consideration of EUR 546 million. The transaction remains subject to regulatory approvals. 

GTS is one of the top infrastructure-based telecommunications service providers in CEE and SEE, and is currently owned by a consortium of international private equity firms, including Bessemer Venture Partners, Columbia Capital, HarbourVest Partners, Innova Capital, MC Partners, and Oak Investment Partners. It serves approximately 38,000 customers from a 26,000km fibre optic network and 14 data centers in the Czech Republic, Hungary, Poland, Romania, and Slovakia. In 2012, the company achieved revenues of EUR 347 million and EBITDA of EUR 87 million pro-forma excluding the Slovak assets, which will be retained by the sellers as part of the transaction.  

According to an Edwards Wildman press release, "while the activities of GTS Central Europe in Slovakia will remain with the Sellers, GTS’ existing and prospective customers will benefit from the backing by Deutsche Telekom through expanded European and Global network reach, access to fixed-mobile convergent service offerings. The sale also 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." 

Timotheus Hottges, the CFO at Deutsche Telekom, explained the deal. "We are investing against the trend. GTS is a further element for developing our integrated market position comprising mobile and fixed-line network services. Strengthening our position with business customers is also a core element of our strategy." And Claudia Nemat, Deutsche Telekom Board member for Europe and Technology, said that, "this acquisition enhances our ability to provide innovative pan-Europeancross-border telecommunications services. Our existing mobile-centric national companies in the Czech Republic and Poland will benefit most from the added fixed-line infrastructure. Therefore, GTS is an ideal addition to our portfolio." 

Edwards Wildman’s corporate and private equity team was led by Partner Shawn Atkinson, with assistance from Partner Michael McCormack and Associates Jill Hanson and Costa Smith. The office’s EU Competition team was led by Partner Becket McGrath with assistance from Associate Trupti Reddy. Boston-based Partners Steve Meredith and Scott Pinarchick led the US team.  

Steve Meredith and Scott Pinarchick advised lead investors Columbia Capital and MC Partners on the original acquisition in 2008, while Shawn Atkinson advised Bessemer Venture Partners. 

The deal follows Deutsche Telekom's acquisition of T-Mobile Czech Republic for EUR 0.8 billion, reported on by CEE Legal Matters on February 12, 2014 and February 14, 2014.  


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