Update: Colt to Buy Japanese Network, Hosting Partner KVH

The acquisition will allow Colt to provide network, datacenter and IT services to clients across Europe and Asia, and to better leverage its existing infrastructure, and to target customers in information-intensive industry sectors, including capital markets, media, legal and insurance services, fixed and mobile network operators and cloud service providers.

London-based Colt is currently predominantly focused on the UK and European markets, though its MarketPrizm low-latency data and trading infrastructure subsidiary already has a footprint in the Asia-Pacific region.

In fact, MarketPrizm recently partnered with KVH to make MarketPrizm's Prizmnet financial extranet available via KVH's datacenters in the region, allowing KVH clients to access more than 30 markets across Asia, Europe and the US via PrizmNet (IMD, June 24).

In addition, KVH─which has offices in Osaka, Singapore, Hong Kong, Shanghai, Seoul and Chicago─outsources some of its service operations to Colt's shared services center in India, where the Colt and KVH teams will be combined following the deal.

The companies also have common ownership and are connected at the board level. KVH is owned by Fidelity Management & Research (FMR), the parent company of Fidelity Investments, and its international business Fidelity Worldwide Investment (FIL), and by associates of FMR, and FIL. FMR also owns 41.15 percent of Colt, with FIL Limited controlling another 16.44 percent of the company. Meanwhile, Colt chief executive Rakesh Bhasin is non-executive chairman of KVH and previously served as its president and CEO, while Colt chairman Simon Haslam is a non-executive director of KVH. In addition, as a result of the deal, KVH CEO Ted Higase will join Colt's executive committee.

The vendor says the deal is expected to deliver annual synergies of €8.5 million ($10.6 million) by 2017. The transaction will be funded through cash resources and committed bank facilities, and is subject to the approval of independent shareholders. Colt expects the deal to enhance earnings and cash flow in 2016.