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Telstra Wraps Pacnet Acquisition Pending U.S. Approval

**Editor’s Note: Please click here for a recap of the biggest channel-impacting mergers in Q1 2015.**

Telstra executives say their company’s $697 million purchase of service-provider Pacnet will double its number of customers in Asia.

The Australian telco giant wrapped the acquisition Thursday, touting the opportunity to expand its influence outside of Australia.

“The completed acquisition will … greatly increase our network reach and data-center capabilities across the region,” said Brendon Riley, Telstra’s executive of global enterprise and services.

Hong Kong-based Pacnet operates more than 25,000 miles of submarine cable and approximately 100 points of presence (PoPs). Perhaps more important for Telstra, Pacnet has an IP VPN presence in China.

“Our strategy is centered on serving enterprise and carrier customers doing business in Asia,” Telstra CEO David Thodey said when his company went public with the deal in December of 2014.

Pacnet brings 29 data centers and an expanded Chinese presence to the table, Riley said. The carrier has one more small hurdle: regulatory approval for Pacnet’s U.S. assets.

“The acquisition provides us greater specialization and scale, including the delivery of enhanced services, such as software-defined networking, and opens up significant incremental opportunities for our business,” Riley said.

The acquisition two-and-a-half years after Pacnet announced an initiative to expand its channel efforts in the U.S. in 2012. The company promoted Jason Kitzmiller as director of channel sales a year ago.

Telstra says it will take care of Pacnet’s debt, which includes $350 million in high yield notes “as soon as practicable.” The Pacnet name will be retired once the companies are integrated.


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