Europe Fiber Network Operators Shrug Off Pandemic to Seek Buyers

Myriam Balezou, Dinesh Nair and Aaron Kirchfeld (Bloomberg) -- At least three fiber-optic network operators are pushing ahead with divestments in Europe, as demand for infrastructure assets helps such companies shrug off the effects of the coronavirus pandemic.

GTT Communications Inc. has kicked off a sale process of its infrastructure division, which could fetch as much as $2.5 billion, people with knowledge of the matter said. The McLean, Virginia-based company has sent out marketing materials to potential buyers of the assets, which include a high-speed network across Europe as well as data centers, according to the people.

The sale process is mostly attracting infrastructure-focused investment firms, the people said. Some of the assets were acquired by GTT through its $2.3 billion purchase of London-based Interoute in 2018.

Separately, London-focused internet service provider Community Fibre Ltd. asked for first-round bids this month, the people said. A sale could value the company at about 200 million pounds ($248 million), the people said, asking not to be identified because the information is private.

Glide, another European broadband network operator, is also working with an adviser as it seeks a buyer for the company, the people said. The sale could fetch around $200 million to $300 million, according to one of the people.

Related:Digital Realty Closes Its Acquisition of Interxion

The company, based in Somerset, England, provides connectivity to student housing as well as business parks, industrial estates and serviced offices. Apart from the U.K., it also has operations in Ireland, Spain, Italy, Germany, Austria and the Netherlands, according to its website.

Infrastructure deals -- often backed by physical assets that provide steady, long-term returns -- continue to attract investors even as the broader market turmoil leads to financing drying up for other types of acquisitions. Several suitors made binding bids for Portuguese toll road operator Brisa, Bloomberg News reported this month.

An investor group backed by Global Infrastructure Partners and Brookfield Asset Management Inc. is in talks with banks about borrowing around $8 billion to fund the potential purchase of a stake in Abu Dhabi National Oil Co.’s natural gas pipelines, people with knowledge of the matter said last week. An arm of Colony Capital Inc. is also buying data center assets in Latin America.

Home internet usage has been surging as office employees around the world embrace remote work setups. The lockdowns in many countries have also closed outside entertainment venues, leading to surging traffic for sites like Netflix Inc. and driving demand for data centers and supporting network infrastructure.

Related:Colony Capital’s CEO-Elect Marc Ganzi Explains Its Pivot to Digital

Representatives for Community Fibre and GTT declined to comment, while Glide didn’t immediately respond to requests for comment.