TDC AS is paying DKK 3.3bn ($541.7m) for Song Networks Holding AB, a Stockholm, Sweden-based company with 14,300 business customers that use its network in Denmark, Sweden, Norway, and Finland.
Copenhagen-based TDC, the Danish incumbent carrier, needs Song as much for its expertise in IP VPNs as its customer base to build its position in the Nordic region.
With its own network and 850 employees, Song recorded net income of SEK 9m ($1.2m), up from a loss of SEK 175m (23.4m) on revenue down 3% at SEK 2.26bn ($302.2m). To increase profitability, Song had been terminating unprofitable services to small customers.
The price TDC is paying is regarded as generous, but is designed to deter other bidders, and a staid incumbent like TDC needs the dynamism that Song’s management will bring to the combined company.