Monday, May 14, 2018

Vodafone to acquire Liberty Global assets


Vodafone acquires Liberty Global assets for EUR 18.4b o/w 10.8 cash, 7.6 existing Unitymedia debt.
  • Operations
    • DE (Unitymedia; together 25m HP = 2/3)
    • HU (1.8m HP = 43%)
    • RO (3.1m HP = 41%)
    • CZ (1.5m HP = 33%)
  • Valuation
    • EV EUR 18.4b
    • 10.9x EBITDA 2019 (pre synergies)
    • 8.6x EBITDA (post synergies 5 yr)
    • 12.5x OpFCF (post synergies 5 yr)
  • Closing
    • To close mid 2019
    • Break-up fee EUR 250m payable to Vodafone, or payable to Liberty if for antitrust issue.
  • Synergies
    • Cost/capex synergies (network integration, IT/billing simplification, procurement, consolidating overlapping functions) 535m EUR/yr from yr 5 (before integration costs)
    • NPV EUR 6b (after integration costs) o/w rev synergies NPV EUR 1.5b (from cross-selling)
    • Integration cost EUR 1.2b (in first 5 yr).
  • Accreditive to FCF from yr 1.
  • Increases targeted net debt/EBITDA to 2.5-3.0x (pro forma at high end).
  • Liberty Global to provide transitional services to Vodafone (IT, TV platform tech, connectivity, other support) max. 4 yr; pro forma EUR 128m in 2019.

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