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KT, Daishin PE acquire 100% stake in global data firm Epsilon

The telecom company makes the biggest overseas investment since the new CEO took the office in March 2020

By Sep 09, 2021 (Gmt+09:00)

KT CEO Koo Hyun-mo (left) at the share purchase agreement (SPA) signing ceremony held online on Sept. 8.
KT CEO Koo Hyun-mo (left) at the share purchase agreement (SPA) signing ceremony held online on Sept. 8.

South Korea’s major telecom company KT Corp. is expanding investments in future growth areas outside the traditional mobile sector.

KT said on Sept. 9 that it acquired a 100% stake in the global data company Epsilon Global Communications Pte. Ltd. in a joint investment with Daishin Private Equity (PE) under Daishin Securities.

The two firms together invested $145 million for the acquisition of Epsilon from Malaysia’s Kuok Group. KT acquired a controlling stake in Epsilon, while Daishin PE joined as a financial investor. The exact share distribution between the two firms was not disclosed.

Industry analysts highlight that the deal marks the biggest overseas investment made by KT since the incumbent CEO Koo Hyun-mo took the job in March 2020. They said that KT’s focus under Koo’s leadership has been on accelerating digital transformation (DX) and raising its profile in the global data market.

Established in 2003 in London, Epsilon is a global data company that provides IT platforms and solution services to firms and institutions to transmit data safely across different countries. The business model requires extensive network infrastructure including submarine cables, data centers, ethernet, virtual private newtorks (VPNs) and point of presences (PoPs). A PoP is an access point where two or more networks or communication devices share a connection.

Epsilon currently has more than 260 PoPs in 41 cities of 20 countries worldwide. Epsilon also operates three large-scale internet data centers (IDCs) in London, New York and Singapore. The data company also operates Infiny, an on-demand connectivity platform powered by cloud technologies.

Infiny by Epsilon is an on-demand connectivity platform.
Infiny by Epsilon is an on-demand connectivity platform.

KT TO EXPAND BUSINESS PRESENCE IN EU, US  

KT will scale up its global data business through the bolt-on acquisition of Epsilon. Specifically, the company plans to create new synergies by combining its ICT expertise and business development capabilities with Epsilon’s global network and infrastructure.

KT’s global data services have been largely limited to operations in Asia using undersea cables. The Epsilon acquisition means that KT will be able to draw in South Korean firms’ EU and US branches, as well as EU-based and US-based firms wishing to enter Asian markets as new clients.

“Up to now, South Korean companies wishing to share data with their overseas branches had to use VPNs or other private networks. Such practice was not only complex but also had a low level of data protection. KT and Epsilon will facilitate the process with our extensive global data infrastructure,” said KT CEO Koo Hyun-mo.  

KT added that Epsilon’s global data infrastructure will be used to empower its artificial intelligence (AI) service GiGA Genie as well as its fast-growing DX businesses.

KT projects that the global data services market will grow from 72 trillion won ($61.6 billion) last year to 100 trillion won ($85.5 billion) by 2025.

Write to Han-gyeol Seon at always@hankyung.com

Daniel Cho edited this article.

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