OREANDA-NEWS. August 25, 2014. Vodafone announces that Vodafone Greece has agreed to acquire 72.7% of the share capital of Hellas Online SA (“HOL”) from the Intracom Group (“Intracom”) and World Equities Investments Holdings SA (“WEI”) for a total cash consideration of EUR72.7m (the “Transaction”).

Completion of the transaction is subject to a number of conditions, including antitrust clearance by the relevant competent authorities. The Transaction values the fully diluted equity of HOL at EUR 100m and is equivalent to an enterprise value of EUR 311m including HOL’s adjusted net debt of EUR 211m.

Principal benefits of the transaction

Acceleration of Vodafone’s unified communications strategy in Greece

HOL is a leading provider of broadband and fixed-line telephony in Greece with around 519,000 customers as at 31 December 2013, representing a market share of approximately 11%[2]. The Transaction builds on the successful track record of commercial cooperation between Vodafone Greece and HOL since 2009, when Vodafone Greece became an 18.5% shareholder, and accelerates Vodafone’s unified communications strategy in Greece. The Transaction creates a leading integrated telecom operator in Greece with the number two market position by revenues in both fixed-line and mobile communications[3]. The combined company will have the scale, management expertise, products and services and funding needed to compete more effectively in the Greek telecommunications market.

Cost and capex savings

Vodafone expects to achieve cost and capex synergies with an annual run-rate of EUR 24m before integration costs by the third full year post completion, equivalent to a net present value of approximately EUR 135m 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.

The Transaction values HOL at a multiple of 4.5x 2013A EBITDA and 9.8x 2013A OpFCF, which is equivalent to a multiple of 5.6x 2013A OpFCF adjusted for cost and capex synergies.

HOL management and employees
Vodafone views the management and employees of HOL as important to the future success of the enlarged company. HOL’s employee base would also benefit from greater and wider career opportunities available in a global business such as Vodafone.

Financing
Vodafone will finance the transaction from its existing cash resources and committed but undrawn bank facilities.