Advised freenet, an alternative telecoms company, on its acquisiton of debitel Group, the largest MSP provider in Germany
Arma Partners is pleased to announce that it acted as M&A advisor to freenet AG (Frankfurt:FRN) in freenet’s agreement, announced on 27 April 2008, to acquire debitel Group. The aggregate consideration payable will be ca. €1.63 billion. The vendor is a Netherlands holding company controlled by funds managed by Permira.
Freenet AG is a leading alternative telecoms company in the German market. debitel Group is the largest independent mobile service provider (MSP) in Germany, with over 13 million subscribers, and one of the leading overall mobile providers. debitel Group had pro forma 2007 revenues of ca. €3.36 billion and EBITDA of €255m. The combination of freenet’s mobilcom subsidiary, with over 5.5 million subscribers, with debitel will create the #3 overall mobile provider in Germany with 19m pro forma subscribers. freenet will also become the company in Germany with the most mobile gross customer additions (ca. 6 million in 2007), and the largest independent telecoms distribution company, with more than 1,000 owned distribution locations. The deal is a significant step in the long awaited consolidation of the German telecoms market and gives freenet a leading position from which to participate.
The total deal value of €1.63bn comprises, on a debt free, cash free basis, the issuance of 32m new freenet shares to the vendors (current market value approx. €360 million), the issuance by freenet of a €132.5m vendor loan note to the vendors and the assumption by Freenet of debitel’s existing term banking facilities of €1,135m. Completion of the transaction is subject to customary approvals and is expected to take place within 2 to 3 months.
This is the second transaction on which Arma has worked with freenet, having advised also on freenet’s acquisition of Tiscali’s German broadband and narrowband subscriber base in early 2007.