Germany's United Internet acquires full control of Versatel for €586 mn
03 September 2014
German web-access provider United Internet AG will acquire full control of fibre-optic network operator Versatel GmbH for €586 million in cash, Bloomberg reported.
With the acquisition, United Internet gets full control over Germany's second-largest fibre-optic network spread across 226 cities.
The move would bolster United Internet's position as the country's second-largest digital subscriber line provider after Deutsche Telekom AG, boosting the number of its DSL customers to 4.12 million.
The internet carrier will acquire the 74.9-per cent of Versatel it does not already own from US private-equity firm Kohlberg Kravis Roberts & Co in cash, according to a statement from the Montabaur, Germany-based company today.
United Internet had acquired a 25.1-per cent stake in Versatel since 2012.
The deal marks a further consolidation in Europe's telecommunications industry as operators combine in response to price pressure brought by competition. In July, Telefonica SA won EU approval for the merger its German unit with Royal KPN NV E-Plus after it pledged to bolster smaller rivals and divest spectrum, a merger that created the country's largest mobile carrier.
The purchase price and repayment of Versatel's €361 million of net debt would be financed by new loans, United Internet said in a statement Reuters reported.
Versatel projected earnings before interest, taxes, depreciation and amortisation of €164 million this year, while sales would be flat at €548 million, United Internet said.