The shareholders of Spain’s leading cable operator Ono have today (March 17) agreed to sell all of the shares in the company to Vodafone Group.
In a statement, Ono says that the final completion of the transaction is subject to the approval of the relevant competition authorities.
Vodafone meanwhile says the value of the transaction is equivalent to €7.2 billion on a debt and cash free basis.
Ono is backed by Providence Equity Partners, Thomas H Lee Partners, CCMP Capital Advisors and Quadrangle Capital and has the largest next generation network in Spain, covering 7.2 million homes and providing services to 1.9 million customers in 13 of Spain’s 17 regions.
Vodafone says it expects to achieve cost and capex synergies with a run-rate of approximately €240 million before integration costs by the fourth full year post completion, equivalent to a net present value of approximately €2.0 billion) after integration costs.
It adds that it sees a significant opportunity to accelerate growth in unified communications products and services by leveraging its extensive distribution and marketing capabilities and through cross-selling to each company’s customer base.
Vodafone estimates revenue synergies with a total net present value of approximately €1 billion. The transaction values Ono at a multiple of 7.5x 2013 EBITDA and 10.4x 2013 OpFCF, adjusted for cost and capex synergies.
The deal is Vodafone’s second major cable acquisition in six months, with the company having secured a controlling stake in Germany’s Kabel Deutschland last September. It already has a presence in Spain through a deal with Orange.
Vodafone has been pursuing Ono for some but as recently as last week the cable company’s shareholders said they would be holding an IPO.
Commenting on the deal, Vodafone group chief executive Vittorio Colao said: “The combination of Vodafone and Ono creates a leading integrated communications provider in Spain and represents an attractive value creation opportunity for Vodafone. Demand for unified communications products and services has increased significantly over the last few years in Spain, and this transaction – together with our fibre-to-the-home build programme – will accelerate our ability to offer best-in-class propositions in the Spanish market. We look forward to welcoming the management and employees of Ono to Vodafone and working together to serve our customers across Spain”.
José María Castellano Ríos, chairman of the Ono board of directors, added: “This transaction reflects Ono’s attractive position as Spain’s leading provider of high speed broadband, premium pay-TV and fixed communications. As part of Vodafone, Ono will continue to seize new growth opportunities and deliver the quality that our customers expect. The enlarged business is also expected to drive innovation in the Spanish telecommunications industry.”
