MUMBAI: John Malone-controlled Liberty Global is buying out Unitymedia, Germany‘s second largest operator, for a total consideration of $5.2 billion.
Liberty will buy 100 per cent of the shares of Unitymedia for $3 billion.
According to the deal, Liberty will also inherit the $2.2 billion debt of Unitymedia, which is owned by a group of shareholders led by BC Partners and Apollo Management of New York.
The total consideration is, thus, $5.2 billion, excluding transaction costs, and represents a purchase price multiple of approximately 7.4 times of Unitymedia’s 2010 Adjusted EBITDA1 under IFRS accounting standards.
Taking into consideration the estimate of the annual impact of synergies that may be realised following the full integration of the acquisition, the effective purchase price multiple would be approximately 6.6 times 2010 Adjusted EBITDA. Completion of the transaction is expected to occur in the first half of 2010 and is subject to regulatory approval.
Unitymedia‘s cable footprint, passing 8.8 million homes, covers ten of the 20 largest cities in Germany, including Cologne, Dusseldorf, and Frankfurt.
Says Liberty Global president, CEO Mike Fries, "We are excited about this transaction as it complements our existing European footprint and has significant untapped growth potential
in one of the fastest growing cable markets in Europe. The addition of Unitymedia not only enhances our European presence, but adds significant scale to our global operations, as our footprint, including Unitymedia, will exceed 40 million homes."
