Liberty Global to Sell Austrian Operations to T-Mobile Austria
December 21 2017 - 11:40PM
Business Wire
- Sale price of €1.9 billion values
UPC Austria at ~11x 2017 Segment OCF1
- Transaction expected to close in the
second half of 2018
Liberty Global plc (“Liberty Global”) (NASDAQ: LBTYA, LBTYB and
LBTYK) today announced that it has reached an agreement to sell its
Austrian operations, UPC Austria, to T-Mobile Austria. At September
30, 2017, UPC Austria’s network passed 1.4 million homes and served
654,000 customers who subscribed to 513,000 broadband, 450,000
voice and 468,000 video services.
Liberty Global will sell UPC Austria for a total enterprise
value of approximately €1.9 billion ($2.2 billion2), subject to
customary debt and working capital adjustments at completion. The
sale price represents a multiple of nearly 11x UPC Austria’s
estimated 2017 adjusted1 segment operating cash flow (“Segment
OCF”), as customarily defined by Liberty Global, or approximately
34x UPC Austria’s estimated 2017 operating free cash flow
(“OFCF”)3. Closing of the transaction is subject to regulatory
approval, which is not expected until the second half of 2018.
Mike Fries, Chief Executive Officer of Liberty Global said,
“This transaction highlights the strategic and financial value of
our fiber-rich networks in a rapidly converging world and the
significant synergies inherent in fixed-mobile mergers. We have
operated in Austria for over 20 years and are extremely proud of
the market-leading position we’ve built in both digital video and
super-fast broadband. Looking forward, we believe the combination
of UPC Austria and T-Mobile Austria will provide the national scale
necessary to compete with larger companies like A1, and provide
residential and business consumers with the highest quality
services at the best price. We remain focused on value creation for
our shareholders and are pleased with the premium valuation being
attributed to one of our smaller operating markets.”
The proceeds from the sale are expected to be used for general
corporate purposes, which may include leverage reduction for the
remaining UPC bank group, re-investment into our business, and
support for the company’s share repurchase program.
Liberty Global has agreed to provide certain transitional
services for a period of up to four years. These services
principally comprise network and information technology-related
functions. The annual charges will depend on the actual level of
services required by T-Mobile Austria. Liberty Global will also
allow T-Mobile Austria to use the UPC brand for a transitional
period of up to three years as part of the transaction.
LionTree Advisors acted as a financial adviser to Liberty Global
on the transaction.
1 For the purpose of the purchase price multiple calculation,
the estimated 2017 Segment OCF of UPC Austria has been reduced by
€9 million, representing the estimated net amount of transitional
services to be provided by Liberty Global during the first year
following closing.2 Convenience translation based on USD/EUR spot
rate of 1.18.3 OFCF represents the adjusted Segment OCF of UPC
Austria, as described above, less property and equipment additions
as customarily defined by Liberty Global.
Forward-Looking Statements and Disclaimer
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995, including statements regarding our strategic outlook, the
timing and benefits of the transaction, including scale and service
benefits, the expected use of proceeds, and other information and
statements that are not historical fact. These forward-looking
statements involve certain risks and uncertainties that could cause
actual results to differ materially from those expressed or implied
by these statements. These risks and uncertainties include the
ability to obtain regulatory approvals for the transaction, as well
as achieve other customary closing conditions, the combined
business’ ability to achieve anticipated financial and operational
growth, continued use by subscribers of the combined business’
services, the ability of the combined business to achieve expected
operational efficiencies, synergies and economies of scale, as well
as other factors detailed from time to time in Liberty Global’s
filings with the Securities and Exchange Commission including our
most recently filed Form 10-K, as amended, and Form 10-Q. These
forward-looking statements speak only as of the date of this
release. Liberty Global expressly disclaims any obligation or
undertaking to disseminate any updates or revisions to any
forward-looking statement contained herein to reflect any change in
Liberty Global’s expectations with regard thereto or any change in
events, conditions or circumstances on which any such statement is
based.
About Liberty Global
Liberty Global is the world’s largest international TV and
broadband company, with operations in more than 30 countries across
Europe, Latin America and the Caribbean. We invest in the
infrastructure that empowers our customers to make the most of the
digital revolution. Our scale and commitment to innovation enable
us to develop market-leading products delivered through
next-generation networks that connect our over 24 million customers
who subscribe to over 50 million television, broadband internet and
telephony services. We also serve over 10 million mobile
subscribers and offer WiFi service across 10 million access
points.
Liberty Global’s businesses are currently comprised of two
stocks: the Liberty Global Group (NASDAQ: LBTYA, LBTYB and LBTYK)
for our European operations, and the LiLAC Group (NASDAQ: LILA and
LILAK, OTC Link: LILAB), which consists of our operations in Latin
America and the Caribbean.
The Liberty Global Group operates in 12 European countries under
the consumer brands Virgin Media, Unitymedia, Telenet and UPC. The
Liberty Global Group also owns 50% of VodafoneZiggo, a Dutch joint
venture, which has 4 million customers, 10 million fixed-line
subscribers and 5 million mobile subscribers. The LiLAC Group
operates in over 20 countries in Latin America and the Caribbean
under the consumer brands VTR, Flow, Liberty, Más Móvil and BTC. In
addition, the LiLAC Group operates a sub-sea fiber network
throughout the region connecting over 40 markets.
For more information, please visit www.libertyglobal.com or
contact:
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version on businesswire.com: http://www.businesswire.com/news/home/20171221006165/en/
Liberty Global Investor RelationsJohn Rea,
+1 303 220 4238Stefan Halters, +1 303 220 4528orLiberty
Global Corporate CommunicationsMatt Beake, +44 20 8483
6428Julia Hart, +31 6 1121 2871
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