British Telecom (BT) is currently working with the investment bank Citigroup to explore a potential sale of the Radianz unit. This decision is part of CEO Allison Kirkby's comprehensive strategy to streamline the British telecommunications group and reduce costs to ensure sustainable growth.
Radianz, a service unit connecting financial institutions such as banks, brokers, exchanges, and clearinghouses, was acquired by BT from Reuters in 2005 for $175 million, complemented by a $3 billion contract to provide all network services for the media and financial information company. The unit generates an annual EBITDA of approximately 60 to 70 million pounds.
The current consideration to sell Radianz is taking place in light of changing market conditions and the need to streamline the business portfolio. "We have a lot to catch up on," said Stuart Pringle, CEO of BT, to the Financial Times. "The site is huge, the infrastructure is outdated in many areas – yes, we have some shiny aspects in some places, but we need to invest massively.
The potential sale of Radianz could reach a value in the low hundreds of millions of pounds, as explained by a person familiar with the matter. This measure is intended to enable BT to focus more on high-margin and promising business areas while simultaneously increasing efficiency.
Radianz is part of the BT business unit formed in 2022 from the merger of the enterprise and global units. In recent years, the profitability of this division has decreased, with adjusted revenues declining by 5 percent to 1.9 billion pounds in the third quarter and adjusted EBITDA falling by 2 percent to 378 million pounds. The unit's performance has been affected by "legacy managed contract declines," reduced sales activity in low-margin products, and a contraction of the portfolio, despite ongoing cost transformations.
Allison Kirkby, who took over as CEO of BT in February, is pursuing a strategy of modernizing and simplifying the product portfolio and business processes. "We are streamlining our global operations to create a simpler and more efficient corporate structure," she emphasized at the annual results in May. This also includes exploring further sale options for other units, such as the Irish and Italian branches.
The planned sale of Radianz aligns with BT's efforts to strengthen market position while securing financial foundations. Despite the positive outlook for Radianz, the final decision on the sale is yet to be determined, as BT and Citigroup have not yet commented.
