The telecom group, whose headquarters are located in Asturias, is set to keep the same employment and internal structure, and from August will become a listed entity on the London Stock Exchange under the name of Zegona Communications.
Zegona Communications, a British operating company established with the objective of acquiring businesses in the telecommunications, media and technology sector, has just announced the acquisition of the Asturian company Telecable, for the enterprise value of 640 million euros. It will mark Zegona’s debut in Europe.
Commenting on the acquisition, the company CEO Eamonn O’Hare, admits that Telecable was the first objective, though “some 160 companies” of potential interest have already been pin-pointed in Europe, and according to media sources such as El Comercio, he is not ruling out acquiring more assets in Spain.
To fund the acquisition of the Asturian firm, Zegona will use 251 million pounds sterling (around 353 million euros) of new capital supported by global investors and a credit line backed by the business bank Goldman Sachs, which has acted as financial advisor throughout the operation. This situation means that Telecable will appear listed on the London Stock Exchange (under the name of the British company) from August, following the consolidation of the purchase by Zegona and the current capitalist investors: Carlyle and Liberbank.
To date, Carlyle holds 85% of Telecable shares, with Liberbank holding the remaining 15%. The British firm is to own 100% of the Asturian company, which is a current telecommunications leader in Asturias. It is a television, telephone and Internet provider and also offers advanced business solutions across the region. It has over 162,000 residential and business clients and in 2014 it had a revenue of 131 million euros and an EBITDA of 63 million.
Since the 2011 acquisition by Carlyle, Telecable was revalued by 70%. By December 2011, the Asturian company was valued at 380 million euros, and despite the severe crisis that accompanied the sector throughout 2009, from 2011, Telecable was able to increase its turnover by 8.76%, improve its EBITDA by 25.66%, boost its client numbers and raise its mobile lines by 93%.
Invest in Asturias. Telecable. Reasons behind the acquisition
The company’s progress over the past three years is one of the key points in understanding the purchasing intentions of the British firm Zegona. In fact, O’Hare has recently revealed to media that the Asturian company has an “outstanding” team which shall continue to manage the company without job losses or alterations to the current structure.
The aim is to “improve a good business”, affirms O’Hare. Zegona plans to draw out the maximum potential value of the Asturian company by increasing its residential market penetration, adding functionalities for final users with television, and by improving the profitability of its mobile department, according to regional and national media publications.
The British company aims to optimise the company and deliver its full potential in the medium term.
Reference sources
- El fondo británico Zegona compra Telecable por 640 millones. El País
- Zegona compra Telecable de Asturias por 640 millones. Cinco Días
- Zegona pretende impulsar la expansión de Telecable y descarta venderla a corto plazo. La Nueva España
- Zegona compra Telecable con el objetivo de convertirla en un «competidor poderoso». El Comercio
- Zegona compra Telecable para «mejorar el negocio» y venderla en un plazo de siete años. El Comercio
- Zegona planea conservar Telecable «entre tres y siete años». El Comercio
