Vodafone’s Greek subsidiary has struck a deal to acquire 72.7% of local broadband and fixed-line operator Hellas Online for €72.7m (US$97m). The stake was bought from Greek telecoms conglomerate Intracom Group and World Equities Investments…
Vodafone’s Greek subsidiary has struck a deal to acquire 72.7% of local broadband and fixed-line operator Hellas Online for €72.7m (US$97m).
The stake was bought from Greek telecoms conglomerate Intracom Group and World Equities Investments Holdings (WEIH).
Vodafone, advised by BofA Merrill Lynch, will finance the transaction from its existing cash resources and committed but undrawn bank facilities, according to a stock exchange filing.
Hellas Online’s stock has risen 19.95% on the Athens bourse today while Vodafone’s share price is up 1.58%.
Vodafone already had 18.5% of Hellas Online and today’s acquisition gives it 91.2% of the business. Intracom held roughly 57% of the business and WEIH approximately 15%.
The deal is set to close in Q4 this year and, provided that happens, Vodafone will then be under obligation to extend a mandatory takeover offer for Hellas Online’s remaining shares.
The transaction values the fully diluted equity of the target at €100m and is equivalent to an enterprise value of €311m, including Hellas Online’s adjusted net debt of €211m.
Vodafone said the transaction values Hellas Online at a multiple of 4.5x its 2013 adjusted EBITDA and 9.8x its operating FCF for last year, equivalent to a multiple of 5.6x 2013 operating FCF adjusted for cost and capex synergies.
At the end of last year, Hellas Online had 519,000 customers giving it a market share of around 11%. It generated total revenue of €227.4m, EBITDA of €68.4m and capex of €36.7m.
Vodafone said that once the acquisition closes it would be the number two player in both the mobile and fixed-line markets, based on revenue estimates.
In July, Vodafone and Greek telco Wind Hellas made a joint takeover bid for Athens-listed alternative fixed-line operator Forthnet as the British telco looks to challenge market leader OTE.
Vodafone has made a strategic decision to look for convergence plays in European markets where it already operates mobile services. In addition to the Forthnet offer, it closed its €7.2bn acquisition of Spanish cableco Ono in July and bought a majority stake in Germany’s largest cableco, Kabel Deutschland, for €7.7bn last year.
