M&A Merger and acquisition
Freenet to Acquire debitel Group
Auteur : Anshu Shrivastava
Du : 29/04/2008
Freenet AG has signed an agreement for the acquisition of the debitel Group, mainly consisting of debitel AG, TALKLINE GmbH and _dug telecom. The seller, Netherland-based debitel Holding, is a holding company controlled by Permira funds.
This acquisition is seen as a major step in the consolidation of the German telecom market, and is expected to create Germany’s leading network-independent telecom and Internet company.
In addition, the companies believe that the this latest acquisition will help the combined group to attain a number one position in mobile services provision, and number three position among all mobile providers in Germany, measured by subscribers.
freenet states that with 1.016 shops and retail partners such as electronic partners, Hertie, Kaufhof, Karstadt and the Media-Saturn Holding, the combined group will also have the strongest distribution channel for telecom and Internet products in Germany.
“This transaction is a defining moment in the long-discussed consolidation of the German telecoms market,” said Eckhard Spoerr, CEO at freenet.
Spoerr also noted that once the transaction is complete, his company will possess the necessary corporate size and depth to command a leading position in the German telecoms market.
“Strengthened by its merger with the debitel Group, freenet will develop its business as a major network-independent, distribution-oriented telecoms player, focused on mobile and Internet, offering businesses and consumers a full and attractive suite of telecoms products,” he added.
As consideration for the acquisition of the debitel Group, freenet will be issuing 32 million new freenet shares, which is approximately 24.99 percent after the capital increase, with a current market value of ca. EUR360 million.
Additionally, the company will issue a long-term EUR132.5m interest-bearing loan note to the vendor. Officials pointed out that on a cash-free basis, the debitel Group will be acquired with financial liabilities in the amount of approximately EUR1,135 million.
The consideration payable on a debt free, cash free basis (enterprise value) will be ca. EUR1.63 billion, according to officials.
In 2007, debitel took over _dug telecom, one of the largest independent retail chains in the German telecommunications sector. Also, in the same year, debitel acquired TALKLINE, the third largest German service provider.
The transaction will result in expansion of the freenet's management team. The company’s Supervisory Board intends to appoint Oliver Steil, currently CEO of debitel Group, as Chief Sales and Customer Marketing Officer; and Joachim Preisig, currently debitel Group’s CFO, as Chief Operations and Integration Officer of freenet AG.
At present, the completion of the transaction is subject to anti-trust approval by the German cartel authority, Bundeskartellamt and establishment of the conditions necessary for listing the new shares.
The Supervisory Board of freenet AG has approved the acquisition. And, as a consequence of the transaction, the company does not intend to pay a dividend in 2008.
This acquisition is seen as a major step in the consolidation of the German telecom market, and is expected to create Germany’s leading network-independent telecom and Internet company.
In addition, the companies believe that the this latest acquisition will help the combined group to attain a number one position in mobile services provision, and number three position among all mobile providers in Germany, measured by subscribers.
freenet states that with 1.016 shops and retail partners such as electronic partners, Hertie, Kaufhof, Karstadt and the Media-Saturn Holding, the combined group will also have the strongest distribution channel for telecom and Internet products in Germany.
“This transaction is a defining moment in the long-discussed consolidation of the German telecoms market,” said Eckhard Spoerr, CEO at freenet.
Spoerr also noted that once the transaction is complete, his company will possess the necessary corporate size and depth to command a leading position in the German telecoms market.
“Strengthened by its merger with the debitel Group, freenet will develop its business as a major network-independent, distribution-oriented telecoms player, focused on mobile and Internet, offering businesses and consumers a full and attractive suite of telecoms products,” he added.
As consideration for the acquisition of the debitel Group, freenet will be issuing 32 million new freenet shares, which is approximately 24.99 percent after the capital increase, with a current market value of ca. EUR360 million.
Additionally, the company will issue a long-term EUR132.5m interest-bearing loan note to the vendor. Officials pointed out that on a cash-free basis, the debitel Group will be acquired with financial liabilities in the amount of approximately EUR1,135 million.
The consideration payable on a debt free, cash free basis (enterprise value) will be ca. EUR1.63 billion, according to officials.
In 2007, debitel took over _dug telecom, one of the largest independent retail chains in the German telecommunications sector. Also, in the same year, debitel acquired TALKLINE, the third largest German service provider.
The transaction will result in expansion of the freenet's management team. The company’s Supervisory Board intends to appoint Oliver Steil, currently CEO of debitel Group, as Chief Sales and Customer Marketing Officer; and Joachim Preisig, currently debitel Group’s CFO, as Chief Operations and Integration Officer of freenet AG.
At present, the completion of the transaction is subject to anti-trust approval by the German cartel authority, Bundeskartellamt and establishment of the conditions necessary for listing the new shares.
The Supervisory Board of freenet AG has approved the acquisition. And, as a consequence of the transaction, the company does not intend to pay a dividend in 2008.