Sky Selling Easynet For £100 Million, Keeping Network

What does a TV-caster and consumer telco need with a business ISP anyway?

Five years after buying pioneering UK ISP Easynet, BSkyB (NYSE: BSY) says it’s selling it for £100 million to private equity group LDC.

From the announcement:

“Under the proposal, Sky will retain the UK network assets that it acquired as part of the original acquisition of Easynet Group in 2005.

“As part of the proposed sale, Sky and LDC will enter into a long-term supply agreement to grant Easynet Global Services continued access to Sky’s fibre network, which continues to support the fast-growing Sky Broadband and Sky Talk services. Easynet will also continue to be a key supplier to Sky.”

Easynet has been the critical launchpad on which BSkyB has transformed itself in to an internet access provider. Easynet is how I first got on the internet, back in 1995, when it was one of the UK’s top (and few) consumer ISPs along with Demon Internet.

After the acquisition, Sky essentially piggybacked Easynet to build its UK home broadband network. But Easynet made made a £16 million loss in the nine months ended March 31, despite pulling £151 million in revenue.

The sale price is much less than the £211 million Sky paid for Easynet, but becoming an ISP has transformed Sky by more than the value difference in that period.