BT [LON:BT.A] is considering the carve-out of its cloud and financial trading services division BT Radianz as private equity funds circle the asset, three sources familiar with the situation said.
The UK incumbent has received informal inbound approaches for the New York-based division, which offers IP networking connectivity and hosting services for global trading venues, two sources said. The asset, which sits in the BT Global division, has drawn interest from at least three private equity funds, one of the sources said.
The FTSE 100 telco has been engaging with the interested parties but is yet to make a final decision on selling the business, one of the sources said.
BT Radianz generates annual revenues of around GBP 400m, two of the sources said.
Possible bidders will likely look to acquire the business with a view to bolt it on to other similar assets rather than retain it as a standalone business, one of the sources said. Logical bidders could include private equity funds that already own complimentary businesses that could be combined with Radianz, another source added.
The BT Radianz cloud platform supports secure networked financial communities, offering access to applications and services from more than 400 providers. Its customers include large investment banks, hedge funds, market data providers and stock exchanges, global custodians and mutual funds. BT bought Radianz for USD 175m from Thomson Reuters [NYSE:TRI] in March 2005 as it looked to strengthen its networked IT services at the time.
The UK telco is still considering its options for the wider BT Global division, which could potentially lead to bundling and selling Radianz with some of its other BT Global non-core assets, two of the sources said. Formally known as BT Global Services, BT Global provides global security, cloud and networking services to multinational companies worldwide.
BT’s Global division, which does not segment financial reporting for BT Radianz, recorded adjusted revenues of GBP 3.36bn in the year to 31 March 2022, down 10% from GBP 3.73bn recorded in the same period the year. BT cited challenging market conditions and the impact of prior year divestments from the division for the fall. Adjusted EBITDA fell 23% to GBP 456m from GBP 596m in the period following prior divestments and a GBP 35m impact from foreign exchange.
BT declined to comment.
