Saturday, August 29, 1998 Published at 09:19 GMT 10:19 UK
Business: The Company File
Sykes sells Planet Online
Energis is on the lookout for further acquisitions
Euro-sceptic businessman Paul Sykes has sold the UK's largest Internet provider, Planet Online, for up to £85m.
Mr Sykes hit the headlines earlier this week when he revealed his plans to pour a substantial part of his personal fortune into a campaign against Britain joining European monetary union.
Those coffers are now substantially boosted after Energis stepped in to snap up Planet Online.
It is Energis' first acquisition since its floatation last year. Energis carries around 40% of the UK's Internet traffic.
The company's chief executive, Mike Grabiner, says the purchase "reflects the growing convergence of Internet providers and telecomms companies."
It said the deal would bring initial cost savings of £3m and boost earnings in the next financial year. Planet Online will be moving all of its Internet customers onto the Energis network.
Shares in Energis rose on the news but ended the day 10p down at 827.5p in a very weak market.
The company is paying £75m in cash and could pay up to £10m more later if Planet Online's Internet business meets targets up to March 2000.
Energis' finance director, Peter Hibbert, said he expected the new Planet Online subsidiary to grow by 30% to 40% this year, "and then we expect to see growth accelerate even more."
He told reporters the company remains on the lookout for further acquisitions in the business market.
5000km fibre optic network
Energis has teamed up with Deutsche Telecom and France Telecom to extend its network into metropolitan areas and its sales for the year ending 31 March 1998 have risen 73% to £168m. It made a pre-tax loss of £62m.
The company is 74% owned by the National Grid. It carries voice and data on a 5000km network of fibre optic cables wrapped around the earth wires of overhead electricity pylons. Its customers include the BBC, Boots, Microsoft, and Virgin Atlantic Airways.
Planet Online concentrates on providing corporations with Internet access and helping them to set up intranets. Its customers include Barclays and Midland banks, Reuters and Mirror Group newspapers, Thomas Cook and Airtours.
£46.8m to vocal Euro-sceptic
Planet Online started in Leeds in 1995 and is one of the UK's few profitable Internet providers. It employs more than 150 people and had a turnover of £27.5m, making profits of over £500,000.
Its owner, Mr Sykes, stands to add £46.8m to his estimated £250m fortune from his share of the deal.
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