Zegona, a company established to acquire and operate businesses in the European Telecommunications, Media and Technology sector, announces that it has reached agreement with global alternative asset manager, The Carlyle Group and Liberbank, to acquire Telecable de Asturias S.A. the leading quad play telecommunications operator in Asturias, North West Spain, for an enterprise value of €640m.
Zegona will fund the acquisition with a combination of £251m of new equity, backed by global institutional investors, funds from Zegona's recent IPO and a new debt facility arranged by Goldman Sachs. The transaction is expected to close by mid- August 2015.
Commenting on the acquisition, Zegona Chief Executive Eamonn O'Hare said: "There is a significant opportunity to continue the impressive development of the Telecable business. By combining the local knowledge of the team in Spain with the international experience and track record of Zegona, we have the right leadership to drive Telecable forward and deliver its full potential."
"Telecable fits the bill in terms of our reasons for launching Zegona as it is a strategically strong business with considerable opportunity for top line growth and returns. It is also a regional champion underpinned by an extensive high speed fibre network. Our intention is to fully utilize the power of this network in order to differentiate ourselves and offer great value to customers. By leveraging our Virgin Media heritage, we will make Telecable a fierce competitor which delivers for customers and shareholders."
Alejandro Martínez Peón, CEO of Telecable added: "This is a landmark day for Telecable as we become part of a dynamic, expanding listed entity on the London Market supported by very experienced industry sponsors who have a strong track record of growth and value creation. Zegona has the right capital structure in place to continue our Company's growth and to cement our leadership position in the Spanish telecommunications market. After a period of continued growth supported by The Carlyle Group and Liberbank I firmly believe that this is the right step to reinforce Telecable's competitive position, bringing us a better future."
Alex Wagenberg, Managing Director at Carlyle Europe Partners said: "It has been a real pleasure to work with the team at Telecable and our partners at Liberbank over the past four years. Despite the challenging economic climate, we worked tirelessly with the superb management team. This ensured they delivered consistent year-on-year growth in terms of revenues, EBITDA, market penetration, while maintaining their technological and service leadership and minimal customer turnover. We also leveraged Carlyle's in-depth know-how and scale with regard to the telecommunications and cable sector which was a key factor in creating value for our investors and for the Company's continued success."
Goldman Sachs International acted as exclusive financial advisor to Telecable, The Carlyle Group & Liberbank.
J.P. Morgan Cazenove acted as joint bookrunner and joint broker, BNP Paribas acted as M&A financial adviser, Oakley Capital acted as joint bookrunner and Cenkos Securities was joint bookrunner and is Nominated Adviser and joint broker.
Goldman Sachs acted as bookrunner of the term loan facility which will be provided by the Merchant Banking Division of Goldman Sachs. BNP Paribas acted as bookrunner of the revolving credit facility and is agent of the debt facilities.