Vodafone Acquires Ono For €7.2 Billion

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Vodafone has officially confirmed that it will acquire  Spanish cable operator, Ono for a total consideration equivalent to €7.2 billion (£6.0 billion) on a debt and cash free basis.

Ono has the largest next-generation network in Spain with approximately 7.2 million homes released to marketing serving 1.9 million customers in 13 of Spain’s 17 regions.

It is the market leader in high speed broadband, offering superior speeds and the most innovative pay-TV service in Spain. The network has abundant spare capacity and a future-proof fibre architecture.

“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,” Vodafone Group Chief Executive Vittorio Colao said in a statement.

The U.K mobile operator will finance the Transaction from its existing cash resources and committed but undrawn bank facilities.

Vodafone expects to achieve cost and capex synergies with a run-rate of approximately €240 million (£200 million) before integration costs by the fourth full year post completion, equivalent to a net present value of approximately €2.0 billion (£1.7 billion) after integration costs.

Vodafone 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 €1.0 billion (£0.8 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 Transaction is expected to be accretive to adjusted EPS and FCF per share from the first full year post completion after cost and capex synergies and before integration costs.

Wahengbam Rorrkychand

View all contributions by Wahengbam Rorrkychand

Website: http://www.blog.tonsetelecom.com

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