In an announcement on its website, UK-based Vodafone Group disclosed that on 22 August 2014 its cellular subsidiary Vodafone Greece agreed to acquire 72.7% of the share capital of Greek alternative fixed broadband network operator Hellas Online (HOL) from Intracom Group and World Equities Investments Holdings for a total cash consideration of EUR72.7 million (USD95.9 million). Vodafone Greece currently owns an 18.4% stake in HOL, and the transaction – subject to conditions including antimonopoly authority approval – is expected to complete in Q4 2014 to increase its stake to 91.2% and trigger an obligation to extend a mandatory takeover offer for the remaining shares in HOL. Bank of America Merrill Lynch is acting as financial adviser to Vodafone in connection with the transaction, which values the fully diluted equity of HOL at EUR100 million and is equivalent to an enterprise value of EUR311 million including HOL’s adjusted net debt of EUR211 million.
The takeover builds on the commercial cooperation between Vodafone Greece and HOL begun in 2009 when the former became an 18.5% HOL shareholder, and accelerates Vodafone’s unified communications strategy in Greece, creating an integrated operator holding the number two market position by revenues in both fixed line and mobile segments, according to Vodafone’s press release. Vodafone says it expects to achieve cost and CAPEX synergies with an annual run-rate of EUR24 million before integration costs by the third full year post completion, equivalent to a net present value of approximately EUR135 million after integration costs. These synergies are expected to be realised from sharing network and IT infrastructure, savings on marketing and bill collections, and rationalisation of overlapping functions.