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ComputerWire: IT Industry Intelligence

When Mike Grabiner stood down as CEO of Energis Plc last May, he said his next job "won't be in telecoms." Nine months later he may have been true to his word by joining venture capitalist Apax Partners, but reports over the weekend claim his new employer is about to launch a bid for the beleaguered carrier.

While a spokesperson for London, UK-based Energis refused to comment on speculation, it has said that it will sell off its loss making European operations, and it now it appears that it is actively looking for a buyer for the whole company, and is on the verge of breaching banking covenants.

A spokesperson for Apax Partners refused to confirm or deny the speculation, but it is thought to be one of a few venture capital companies interested in bidding to take over the company.

Whichever company is successful in purchasing the company for a knockdown price will also have to negotiate with bondholders and come to an agreement with bankers who are owed £725m ($1.03bn).

Energis's problems started to become apparent months after Grabiner resigned his position without another job to go to. The company's woes stem mainly from its acquisitions in continental Europe, rather than its core UK market, where it has been profitable. Last week Energis confirmed that its core UK operations are expected to account for approximately 75% of its overall revenue and 125% of its EBITDA for the year ending March 2002. However, its continental European operations have been disastrous, and it is now seeking to dispose of them.

Energis built its European operations through a £1bn ($1.4bn) acquisition spree. It showed its European ambitions in November 1999 when it bought Dutch telecoms operator EnerTel NV for £352m ($570.2m). It then spent £60m ($97.6m) on the acquisition of Unisource Carrier Services (UCS), which gave it control of an ATM network with licenses in 12 countries, national interconnect agreements in seven countries, and points of presence in 13 European countries and the US.

At the beginning of last year it completed the purchase of 75% of German web hosting and application provider Ision Internet AG for £496m ($723m). A few months later it was able to purchase nearly all the remaining shares for £86.8m ($126m). Since then the German web hosting market has collapsed, and Energis will struggle to get $30m for it now.

© Computerwire.com. All rights reserved.

5 things you didn’t know about cloud backup

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