US-based PE firm Carlyle Group has agreed to acquire an 85% stake in the Spanish cable operator Telecable.
In a statement yesterday, Carlyle said that the transaction valued Telecable at E400m and that equity for the investment would come from Carlyle…
US-based PE firm Carlyle Group has agreed to acquire an 85% stake in the Spanish cable operator Telecable.
In a statement yesterday, Carlyle said that the transaction valued Telecable at E400m and that equity for the investment would come from Carlyle Europe Partners III, a E5.3bn investment fund.
The Spanish banking group Liberbank holds a 92% stake in Telecable, while the rest is held by the publishing group Editorial Prensa Iberica.
If the agreement is completed, Liberbank will retain a minority share of 15% in Telecable. Editorial Prensa Iberica will no longer hold a stake in the company.
On the basis of the E400m valuation for the whole company, Carlyle will be paying approximately E340m for its stake, with E308m going to Liberbank and E32m going to Editorial Prensa Iberica.
TelecomFinance understands that Liberbank’s financial adviser was Societe Generale, while its legal adviser was Freshfields.
Carlyle was advised by Linklaters. The financing banks (still unknown at the time of writing) were advised by Clifford Chance.
The Financial Times reported that Carlyle would finance the deal through over E220m in debt from a club of banks.
Telecable, which is based in the northern Spanish region of Asturias, has 156,000 fixed, mobile and internet users. It also won a spectrum licence in the recent auction held by the Spanish government, specifically a regional licence for 10 MHz in the 2.6 GHz band.
Carlyle said in its statement that it would support Telecable’s growth and the investment would help the company to keep introducing “innovative communication technologies” into the Spanish market.
The managing director of Carlyle’s European Buyout team, Alex Wagenburg, said: “Telecable has historically delivered strong performance and we look forward to supporting its growth in partnership with its talented management team.”
Telecable’s CEO, Alejandro Martinez Peon, said that his company was pleased at the prospect of working with Carlyle.
“Their industry expertise worldwide combined with a strong local understanding makes it a particularly progressive step in our company’s development,” Peon said.
London-based PE firm CVC Capital Partners and another Spanish cable operator, Ono, had also reportedly made bids for the Telecable stake.
The Spanish newspaper Expansion suggested that an important reason for the decision to accept Carlyle’s bid may have been the fact that (unlike CVC or Ono) it had no interests in other telecoms projects in Spain.
The newspaper speculated that, if CVC or Ono had won with their bids, it would have been logical for them to centralise their operations, which could have led to job cuts at Telecable.
This is not the first private equity acquisition of a majority stake in a Spanish regional cable operator. In May 2010, CVC Capital Partners increased its stake in R Cable, a cable operator based in the Galicia region, to 70%.
Earlier this year, Carlyle and another PE firm, Providence Equity Partners, agreed to sell the Swedish cableco Com Hem to BC Partners for a reported E1.8bn.
Carlyle also owns the French cableco Numericable and the French telco Completel. They were acquired in March 2008.
