Situation
In April 2001, ARC Associates was retained by a business consortium, Telco Holdings Limited ("the Consortium"), led by Dr Asher Gratt, to review the potential acquisition of the UK assets of Viatel Communications, Inc ("Viatel"), including Telco Global Communications Ltd ("Telco").
Dr Gratt is a former founder and owner of Telco. In 1998, Dr Gratt's 30% holding in Telco was sold to Destia Communications, Inc ("Destia"), a company that was subsequently acquired by Viatel.
Approach
In April 2001, ARC Associates initiated talks with Viatel senior management and Viatel's adviser, Credit Suisse First Boston Corp ("CSFB"), regarding the acquisition of certain of Viatel's UK assets. During this process, Viatel filed for Chapter 11 protection in the US while it sought to restructure its business. Over the proceeding weeks, on an extremely tight timetable, ARC Associates assisted in the negotiation of the terms of the transaction and co-ordinated all discussions among the management teams, the legal teams and other advisers.
The Transaction
On 20 June 2001, the Consortium announced that it had acquired all of the business and assets of Viatel Communications (UK) Ltd. The acquisition includes the residential and small business brand "Telco Global Communications", the full range of Destia pre-paid card brands, the SME and mid-market customer base, and the mobile division WaveTech. The total purchase consideration was not disclosed.