KT Corp (formerly Korea Telecom), South Korea’s largest telecommunications company, and Daishin Private Equity, a subsidiary of Daishin Securities, today announced their acquisition of Epsilon Telecommunications, a global connectivity provider, for $145m from the Kuok Group (64% ownership) and Stone Family (32% ownership), amongst others. Specifically, KT Corp is acquiring a 58% stake in Epsilon, while Daishin Private Equity will purchase the remaining 42% ownership interest.

Epsilon Telecommunications – KT Corp Expands Capabilities

Epsilon Telecommunications is headquartered in Singapore, with four additional offices in London, New York, Hong Kong, and Bulgaria. The company is an international connectivity provider with 260+ PoPs (points-of-presence) across 41 cities in 20 countries. Of these total PoPs, 75 are company-owned PoPs, while the remaining are partner-owned PoPs.

Additionally, Epsilon Telecommunications operates portions of three data centers in London, New York, and Singapore. Below are details of each colocation facility:

  • London: Epsilon operates at Telephone House, which is located at 69-77 Paul Street. Particularly, at this data center, the company offers 295 racks of capacity within 11k sqft of total white space
  • New York: Epsilon operates at 60 Hudson Street, with access to all floors of the building. Specifically, at this data center, the company offers 100 racks of capacity within 8k sqft of total white space
  • Singapore: Epsilon operates at New Tech Park, which is located at 151 Lorong Chuan. Particularly, at this data center, the company offers 500 racks of capacity within 12.9k sqft of total white space

Products and Services

Epsilon Telecommunications’ core offering is providing managed connectivity services to 600+ carriers, cloud service providers, and internet exchanges, via its global private backbone network. Particularly, the company provides connectivity and communications in a Network-as-a-Service (NaaS) format through its Infiny platform. Below are Epsilon’s three major business segments:

Data

Epsilon’s data segment provides domestic & foreign enterprises and telecommunications companies with international data connectivity services. Specifically, these services connect a customer’s head office with its branch offices through Epsilon’s PoPs, data centers, subsea cables, and other digital infrastructure.

Epsilon Telecommunications Data Products and Services

Epsilon’s data connectivity solutions include cloud connectivity, ethernet (data center interconnect), remote peering, access, and SD-WAN.

Colocation

Epsilon’s colocation segment offers data center rack space rental and maintenance services.

Epsilon Telecommunications Colocation Products and Services
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Voice

Epsilon’s voice segment delivers local phone numbers and VoIP line services for enterprise customers.

Financials – Epsilon

For FY2020, Epsilon Telecommunications generated total revenue of $50.5m. Decomposing this revenue by segment, the company produced $32.0m of Data revenue, $11.1m of Colocation revenue, and $7.4m of Voice revenue. Notably, during FY2020, Data revenue comprised 63% of Epsilon’s total revenue.

Transaction Rationale – KT Corp, Daishin Acquire Epsilon

KT Corp views the acquisition of Epsilon Telecommunications as an opportunity to pair Epsilon’s global backbone network with KT’s sales capabilities and existing business-to-business (B2B) customer base.

Through Epsilon, KT Corp will gain broader PoP (point-of-presence) coverage globally, particularly in Europe and the United States. As a result, KT Corp will be able to better serve South Korean companies that want to enter international markets, as well as international companies that want to expand into Asia.

Jonathan Kim covers Fiber for Dgtl Infra, including Zayo Group (private), Cogent Communications (NASDAQ: CCOI), Uniti Group (NASDAQ: UNIT), and Lumen Technologies (NYSE: LUMN). Within Fiber, Jonathan focuses on the sub-sectors of wholesale / dark fiber, enterprise fiber, fiber-to-the-home (FTTH), and subsea cables.

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