Liberty Global Completes the Sale of Its Operations in Germany, Hungary, Romania and the Czech Republic to Vodafone
July 31 2019 - 4:59PM
Business Wire
Liberty Global plc (“Liberty Global”) (NASDAQ: LBTYA, LBTYB and
LBTYK) today announced that it has completed the sale of its
operations in Germany, Hungary, Romania and the Czech Republic to
Vodafone Group plc (“Vodafone”) for approximately €19.0 billion
($21.3 billion)1 on a U.S. GAAP basis2. The purchase price
represents a multiple for all four businesses combined of 11.5x3
adjusted Segment OCF4, or approximately 24.0x operating free cash
flow (“OFCF”)5, for 2017 (the full year prior to announcement).
The net cash proceeds were approximately €10.1 billion ($11.3
billion)1.
We have hedged the foreign currency risk associated with the net
proceeds through the use of various derivative instruments, which
had the effect of converting the majority of the euro denominated
proceeds into U.S. dollars at an average USD/EUR exchange rate of
1.12.
ABOUT LIBERTY GLOBAL
Liberty Global (NASDAQ: LBTYA, LBTYB and LBTYK) is one of the
world’s leading converged video, broadband and communications
companies, with operations in six European countries under the
consumer brands Virgin Media, Telenet and UPC. We invest in the
infrastructure and digital platforms that empower our customers to
make the most of the digital revolution. Our substantial scale and
commitment to innovation enable us to develop market-leading
products delivered through next-generation networks that connect 11
million customers subscribing to 25 million TV, broadband internet
and telephony services. We also serve 6 million mobile subscribers
and offer WiFi service through millions of access points across our
footprint.
In addition, Liberty Global owns 50% of VodafoneZiggo, a joint
venture in the Netherlands with 4 million customers subscribing to
10 million fixed-line and 5 million mobile services, as well as
significant investments in ITV, All3Media, ITI Neovision,
LionsGate, the Formula E racing series and several regional sports
networks.
For more information, please visit www.libertyglobal.com.
_________________ 1 Convenience translation based on USD/EUR
rate of 1.12. The amount of net cash proceeds we received from the
transaction differs from the amount we estimated at the time the
deal was announced in May 2018 primarily due to the net effect of
(i) adverse movement in the EUR/USD exchange rate, (ii) higher
vendor financing at Unitymedia in the interim period between
transaction announcement and closing, which had the effect of
Liberty Global receiving a corresponding increase in cash generated
by Unitymedia during the period prior to closing, (iii) a debt
recapitalization at Unitymedia, (iv) the settlement of
centrally-procured vendor financing amounts that are attributable
to the disposed operations, (v) changes in the value of our
derivatives associated with the debt at Unitymedia and (vi) working
capital and cash adjustments
2 Total enterprise value is calculated on a U.S. GAAP basis and
does not include any outstanding indebtedness of the UPC Holding
borrowing group
3 For the purpose of the purchase price multiple calculations,
the U.S. GAAP 2017 Segment OCF of Germany (€1,493 million) has been
reduced by €26 million and the combined U.S. GAAP 2017 Segment OCF
of Unitymedia, UPC Hungary, UPC Czech Republic and UPC Romania
(€1,714 million) has been reduced by €58 million, with each
reduction representing the allocable estimated net amount of
transitional services (excluding amounts related to costs expected
to be capitalized by Liberty Global) to be provided by Liberty
Global during the first year following closing. Segment OCF
represents the portion of Liberty Global’s consolidated OCF that is
attributed to the applicable business and gives pro forma effect to
the adoption of Accounting Standards Update (“ASU") No. 2014-09,
Revenue from Contracts with Customers. The Germany purchase price
multiple calculation is based on our estimate of the total
enterprise value that is attributable to Germany
4 Represents operating cash flow, as customarily defined by
Liberty Global
5 OFCF represents adjusted Segment OCF, as described above, less
property and equipment additions as customarily defined by Liberty
Global
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