German ISP United Internet has acquired 74.9% of Versatel from private equity firm KKR, giving it full ownership of the local fibre operator.
United is paying €586m (US$770.3m) for the stake and will assume Versatel’s €361m (US$474.5m) debt. It is…
German ISP United Internet has acquired 74.9% of Versatel from private equity firm KKR, giving it full ownership of the local fibre operator.
United is paying €586m (US$770.3m) for the stake and will assume Versatel’s €361m (US$474.5m) debt. It is financing the transaction through new loans.
The ISP has had a 25.1% indirect holding in Versatel since the end of 2012.
Versatel’s board projects that the operator will report €548m in revenues this year, €164m in EBITDA and free cash flow of €79m.
Berenberg analyst Usman Ghazi calculated that the purchase price equated to a pre-synergy enterprise multiple of 5.87x, based on the projections for 2014. In a note, he wrote that the deal seems “very attractive” to United.
The internet company said the deal would strengthen its position as Germany’s number two DSL provider, behind Deutsche Telekom. It will be able to boast 4.12 million subscribers when the deal closes, which is expected to be in October subject to antitrust approval.
Dusseldorf-headquartered Versatel has built up Germany’s second-largest fibre backbone through a series of acquisitions between 1999 and 2012. It has 37,000 km of cable covering 226 cities, including 19 of the 25 largest cities in Germany.
Versatel has a consumer business, a wholesale division which provides voice and data interconnection and backhaul to mobile operators, and offers ICT solutions.
In a statement Henrik Kraft, head of KKR Europe’s technology and telecoms team, commented: “During our investment we have enjoyed a close working relationship with the management of Versatel and a strong partnership with United Internet. We are pleased that Versatel will have the opportunity to continue its successful development under the ownership of United Internet.”
