Danish telco TDC has agreed to acquire Norway’s second-largest cableco Get from its private equity owners for NKr13.8bn (US$2.16bn), a deal it says will create Scandinavia’s largest cable TV company in terms of revenue.
TDC will finance the purchase…
Danish telco TDC has agreed to acquire Norway’s second-largest cableco Get from its private equity owners for NKr13.8bn (US$2.16bn), a deal it says will create Scandinavia’s largest cable TV company in terms of revenue.
TDC will finance the purchase from Goldman Sachs’ GS Capital Partners and Quadrangle Capital Partners by selling debt.
The Copenhagen-based company will simultaneously adjust its dividend payout ratio to about 60% of its equity free cash flow. This reduces the dividend payout for 2014 to DKr2.50 per share from a previously-anticipated DKr3.70 per share.
Earlier this month, it was reported that bankers were working on debt financing packages for potential buyers of around €1bn (US$1.3bn), with senior leveraged loans, second lien loans and high-yield bonds all considered as options.
JP Morgan acted as TDC’s financial adviser on the transaction, while Kromann Reumert was its legal adviser. The Danish telco expects the deal, which is subject to the approval of Norwegian competition authorities, to close in Q4 this year.
Get’s owners reportedly hired Goldman Sachs and Deutsche Bank in May to examine an IPO but later opted for a sale process. Private equity firms BC Partners and EQT were also expected to submit bids for Get by last Thursday’s deadline, Reuters reported earlier this month.
The acquisition will see TDC’s cable business increase from 1.2 million to 1.7 million connected households and produce revenues of DKr7bn (US$1.2bn), the company said in a statement.
TDC CEO Carsten Dilling described the deal as the company’s most significant investment in many years, saying it marks its transformation into a leading Scandinavian provider of TV, home entertainment and high-speed broadband services using the cable platform.
“It is also a strategic move into the consumer market in Norway within an industry we know very well from having run our YouSee cable business in Denmark successfully for years.”
Dilling added that TDC Norway, which owns a fibre-based transmission network and focuses on large business customers, and Get, which targets individuals and small and medium-sized businesses, are a good match from both a commercial and a technical perspective.
Get’s current CEO Gunnar Evensen, who has held the post since 2000, will lead the combined organisation in Norway.
Get had a turnover of NKr2.4bn (US$374.8m) in 2013 and EBITDA of NKr1.1bn (US$171.79m), TDC said. It owns and operates a hybrid fibre and coax network in urban areas, passing about 700,000 households and businesses, 500,000 of which are connected customers.
GS Capital Partners and Quadrangle bought Get for €725m in 2007. In 2012, they considered putting the business up for sale and a €1bn-plus price tag was mooted. However, they later decided to reorganise Get’s debt and hold on to the cableco.
Telenor is Norway’s largest supplier of mobile services, pay-TV and fixed broadband in Norway.
