British telco Vodafone has closed its acquisition of Greek fixed-line player Hellas Online after agreeing the €72.7m (US$97m) deal in August. Vodafone already held 18.5% of the operator and now owns 91.2% after buying Greek telecoms conglomerate…
British telco Vodafone has closed its acquisition of Greek fixed-line player Hellas Online after agreeing the €72.7m (US$97m) deal in August.
Vodafone already held 18.5% of the operator and now owns 91.2% after buying Greek telecoms conglomerate Intracom Group’s 57.2% stake and World Equities Investments Holdings’ approximate 15% stake.
Vodafone is now obliged to make a mandatory takeover offer to Hellas Online’s remaining shareholders.
The transaction values Hellas Online’s equity at €100m and gives the company an enterprise value of €311m.
Vodafone was advised by BofA Merrill Lynch on the deal and will finance it using its existing cash resources and committed but undrawn bank facilities.
When the deal was announced, Vodafone said the transaction valued Hellas Online at 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 is now the number two player in both the mobile and fixed-line markets, based on its own revenue estimates.
Vodafone and Hellas Online reportedly signed an agreement in 2009 preventing the UK-owned telco from proceeding with any action in the Greek fixed market without the consent of Hellas Online.
In September Constantinos Zouzoulas, MD of research at Cypriot boutique Axia Ventures Group, explained that the Hellas Online deal would act as a catalyst for the market: “Vodafone couldn’t really do anything else in the Greek telecoms market unless they had the okay from Hellas Online.
“The other market participants knew that the Hellas Online deal would trigger consolidation in the Greek telecoms sector and this is starting to happen now – it’s a sector that needs consolidation and this has been known for some time.”
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. Meanwhile, OTE has made an offer for Forthnet’s DTH business, Nova.
Analysts have been expecting Forthnet’s main shareholders to decide which bidder they prefer by the end of the year.
