Sky completes £100m Easynet Global sale

Sky has completed its sale of the business-to-business part of Easynet to Lloyds Development Capital (LDC) in a £100 million deal.

In July, the satellite broadcaster agreed a deal with LDC - the private equity arm of Lloyds Banking Group - for Easynet Global Services.

The sale was subject to regulatory approval and a "works council consultation" with Easynet employees, which have both now been completed.

Under the deal, Sky retains all of Easynet's UK network assets, but LDC has agreed a long-term supply agreement with Sky granting Easynet wholesale access to Sky's fibre network.

Easynet retains all of its international network and data centre assets, as well as the core IP infrastructure and network management functions.

David Rowe, Easynet's chief executive who founded the company in 1994, will remain in charge of the ISP with the full backing of LDC.

"Our strategy has always been to take a pragmatic approach to the market: we follow our customers, understand their needs, and provide solutions that add value. Our tight focus on our customers will continue under our new ownership," said Rowe.

"LDC's strategy is closely aligned to our business plan and this will allow us to take a longer-term view of the investments we make to give our customers competitive edge."

LDC director Daniel Sasaki added: "Easynet is a dynamic, profitable business which has enjoyed considerable success by providing highly innovative solutions that make its customers more competitive.

"We have made a long-term investment in the company as we believe there is considerable untapped global demand for its unique value proposition. We are looking forward to working with Easynet's management team to help propel the business into a new phase of international growth."

After acquiring Easynet in 2005 for £211m, Sky used the ISP's network to strengthen its Sky Broadband and Sky Talk services, while also launching a 'triple play' package of internet, landline and digital television.

The ownership relationship has been mutually beneficial as Easynet's business has grown by more than 40% since it joined the Sky family.

Sky's sale of Easynet will enable the ISP to focus on its strategy of delivering complex managed networks and hosting services to international corporate clients.

David Molony, principal analyst at consultancy Ovum, said: "Enterprise customers will be reassured by the move because it points to a focused growth and development strategy.

"Some managers in Easynet's competitors' global services divisions might be reflecting with envy on the independence and competitive agility that Easynet has won and which this deal celebrates."