TIDMVOD
RNS Number : 0396G
Vodafone Group Plc
24 May 2017
24 May 2017
MELITA LTD AND VODAFONE MALTA MERGER TO CREATE NEW FULLY
INTEGRATED COMMUNICATIONS PROVIDER IN MALTA
Apax Partners Midmarket SAS ("Apax"), Fortino Capital
("Fortino") and Vodafone Group Plc ("Vodafone") today announced an
agreement to combine Melita Ltd ("Melita") and Vodafone Malta Ltd
("Vodafone Malta") (together, the "Combined Company").
The transaction combines Vodafone Malta, the country's leading
mobile operator with the highest customer satisfaction scores and
an industry-leading 4G mobile network covering 99% of the Maltese
population, with Melita, Malta's leading cable, broadband and pay
TV provider, with a network covering 99% of Maltese households.
Melita offers a wide range of rich content and superfast broadband
download speeds of up to 250mbps.
The Combined Company's mobile and enterprise business will
operate under the Vodafone brand, distribute a wide range of
services including Vodafone's global portfolio of products and
services and benefit from access to Vodafone's extensive expertise
in mobile and fixed operations worldwide.
Transaction rationale
The combination will create a new fully integrated
communications company with the scale and resources required to
offer competitive 'quad play' bundled mobile, fixed broadband,
fixed telephony and TV services to Maltese consumers and a full
range of enterprise services for businesses and the public
sector.
In a market where demand for converged services is accelerating
rapidly(1) , the Combined Company will be in a stronger position to
compete with the fully integrated incumbent, GO, ensuring
sustainable consumer choice over the long term.
The Combined Company is expected to be able to generate cost
synergies through the rationalisation of overlapping activities and
greater network investment efficiency as the Combined Company
introduces 4.5G, and subsequently 5G, mobile networks and
gigabit-capable fixed networks.
Transaction details
At completion, the current shareholders of Melita will own 51%
of the Combined Company and Vodafone Europe B.V. ("VEBV"), the
current shareholder of Vodafone Malta, will own the remaining
49%(2) .
The transaction values Vodafone Malta at an enterprise value of
EUR208 million, equivalent to multiples of 6.8x EV/2016 EBITDA and
15.1x EV/2016 OpFCF. The transaction values Melita at an enterprise
value of EUR298 million, equivalent to multiples of 8.9x EV/2016
EBITDA and 15.3x EV/ 2016 OpFCF(3) .
At completion, the Combined Company's net debt is expected to be
approximately EUR345 million and Vodafone will receive an estimated
cash payment of EUR120 million which will be used for general
corporate purposes. Melita's shareholders will receive an estimated
cash payment of EUR33 million.
The Combined Company will not be consolidated in Vodafone's
accounts and will be reported on an equity accounting basis after
completion of the transaction. The transaction is not expected to
have a material impact on Vodafone Group's free cash flow or
earnings.
The Melita shareholders intend to appoint the current CEO of
Melita, Harald Rösch, as CEO of the Combined Company and Vodafone
intends to appoint the current CFO of Vodafone Malta, Caroline
Farrugia, as CFO of the Combined Company. Vodafone will announce a
new role for Amanda Nelson, the current CEO of Vodafone Malta, in
due course.
Conditions to completion and indicative timeline
The transaction is conditional on approval from the Malta
Competition and Consumer Affairs Authority and is expected to close
in the second half of the 2017 calendar year.
1 According to the Malta Communications Authority, in the fourth
quarter of 2016, 78.7% of fixed broadband connections and 68.4% of
postpaid fixed lines were sold in a bundle. See "Key Market
Indicators for Electronic Communications and Post" Q1 2012 to Q4
2016
2 Excluding the dilutive effect of management incentivisation
plans for the Combined Company
3 Melita underlying OpFCF for the twelve months ended December
31, 2016, adjusted to exclude non-recurring capital expenditure
relating to IRU investments
- ends -
For further information:
Vodafone Group
Media Relations Investor Relations
www.vodafone.com/media/contact Telephone: +44 (0) 7919
990 230
Melita
Melita Chris Scicluna
PR Director - Hype
chris@hypepr.co
Apax Partners MidMarket
Coralie Cornet
Communication Director
+ 33 1 53 65 01 35
coralie.cornet@apax.fr
Fortino Capital
Lyzette Martens
Communications Director
+ 32 2 669 10 50
lyzette.martens@fortino.be
About Vodafone Group
Vodafone Group is one of the world's largest telecommunications
companies and provides a range of services including voice,
messaging, data and fixed communications. Vodafone has mobile
operations in 26 countries, partners with mobile networks in 48
more, and fixed broadband operations in 17 markets. As of 31 March
2017, Vodafone had 515.7 million mobile customers and 17.9 million
fixed broadband customers, including India and all of the customers
in Vodafone's joint ventures and associates. For more information,
please visit: www.vodafone.com.
About Vodafone Malta
For the twelve months ended December 31, 2016, Vodafone Malta
generated EUR30 million of underlying EBITDA and EUR14 million of
underlying OpFCF. For the financial year ended March 31, 2016
Vodafone Malta generated a profit before tax of EUR11 million and
had gross assets of EUR77 million.
About Melita
For the twelve months ended December 31, 2016, Melita generated
EUR33 million of underlying EBITDA and EUR20 million of underlying
OpFCF.
About Apax Partners MidMarket
Apax Partners MidMarket is a leading private equity firm in
France and Europe. With more than 45 years of experience, Apax
Partners MidMarket provides long-term equity financing to build and
strengthen world-class companies. Funds managed and advised by Apax
Partners MidMarket exceed EUR3 billion. These funds invest in
fast-growing middle-market companies across four sectors of
specialisation. Apax Partners MidMarket TMT investment includes
Altran, Gfi Informatique, InfoVista, Melita, Nowo-ONI and
Vocalcom.
About Fortino Capital
Belgian based Investment company Fortino Capital invests in
small and medium-sized businesses with growth potential. Fortino
Capital believes in the potential of visionary entrepreneurs with a
focus on technology, E-commerce and digital transformation. Fortino
Capital brings strengthening of capital, expertise and experience
in the areas of innovation, strategy and growth. For more
information: www.fortino.be
Advisors
Akira Partners LLP, DLA Piper UK LLP and Linklaters LLP acted as
exclusive advisors to Vodafone. Lazard, Weil Gotshal & Manges
and Jones Day acted as exclusive advisors to Apax Partners
MidMarket and Fortino Capital.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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