Thursday, December 22, 2016 —
Telenet Group BVBA, a direct subsidiary of Telenet Group Holding NV ("Telenet") (Euronext Brussels: TNET), has entered into a definitive agreement to acquire Coditel Brabant SPRL for 400 million on a cash and debt free basis from Coditel Holding S.A., a subsidiary of Altice N.V. Coditel Brabant SPRL, operating under the SFR brand (formerly Numéricable), provides cable services to households and businesses in Brussels, Wallonia and Luxembourg and offers mobile telephony services in Belgium through an MVNO Agreement with BASE. Through this acquisition, Telenet would extend its cable footprint beyond the current Flemish and Brussels coverage areas to parts of Wallonia and the Grand Duchy of Luxembourg, while covering roughly two-thirds of the Brussels footprint post this acquisition. Following the acquisition of the Belgian mobile operator BASE in February 2016, Telenet has been pursuing a strategy of positioning itself as a leading provider of converged connected entertainment and B2B services nationwide. The acquisition of SFR BeLux would give a major part of Brussels and part of Wallonia access to Telenet's high quality video, high-speed internet and fixed and mobile telephony services. The transaction is subject to customary closing conditions, including approval from the relevant competition authorities.
- Telenet announces that it has signed a definitive agreement to acquire Coditel Brabant SPRL and its subsidiary Coditel S.à r.l. (together "SFR BeLux") for 400 million on a cash and debt free basis.
- The acquisition values SFR BeLux at 6.5x 2016E Adjusted EBITDA when adjusted for projected annual run-rate synergies of 16 million by 2021. The proposed synergies are mainly driven by (1) an extended footprint in Brussels, (2) the introduction of competitive and appealing quadruple-play offers (combination of video, high-speed internet, fixed and mobile telephony), (3) B2B growth and (4) overall cost synergies.
- Telenet intends to finance the acquisition through a combination of existing cash and cash equivalents and available liquidity under its revolving credit facilities.
- Assuming 50% of the purchase price is financed with Telenet's revolving credit facilities and including a portion of the projected annual run-rate cost synergies, Telenet's pro forma net leverage ratio as of September 30, 2016 would have been approximately 3.6x compared to 3.4x on a reported basis, which is well within Telenet's long-term target range and financial covenants.
- In order to be able to provide an amazing customer experience over the acquired network and to fully compete for market share growth, Telenet expects to invest approximately 12 million over the 2017-2018 timeframe beyond the normalized capex run-rate. Substantially all of the investments would be used to modernize the acquired cable network. In addition, Telenet expects to incur around 4 million of one-time integration expenses.
- The operation would enable Telenet to extend its cable footprint in Brussels and a part of Wallonia. Combined with the recent acquisition of the nationwide BASE mobile network, this will also allow Telenet to position itself as a convergent telecommunications operator in Brussels and a part of Wallonia for residential as well as business customers.
- In Brussels, Telenet would increase its coverage to two-thirds of the municipalities post this acquisition, making it the capital's largest cable operator. Telenet already operates in seven municipalities in the Brussels Capital Region (Schaerbeek, Etterbeek, Koekelberg, Berchem-Sainte-Agathe, Ganshoren, Jette and Forest) and will now extend its operations to six new municipalities (Saint-Josse-ten-Noode, City of Brussels, Watermael-Boisfort, Woluwe-Saint-Lambert, Anderlecht and Molenbeek-Saint-Jean) and two new municipalities in Flanders (Wemmel and Drogenbos). In Wallonia, the acquisition will extend Telenet's coverage to seven new municipalities (Chimay, Couvin, Sivry-Rance, Momignies, Erquelinnes, Beaumont and Froidchappelle in the "boot of Hainaut" region). The acquisition also covers several thousand SFR BeLux mobile customers in Belgium who are using the BASE network.
- The acquisition also includes SFR Belux's operations in the Grand Duchy of Luxembourg.
- The acquisition will shortly be submitted to the Belgian competition authorities for approval. Telenet is confident that approval will be received within a few months.
John Porter, Telenet CEO: "We are very pleased with the acquisition of SFR BeLux as it would enable Telenet to extend its geographical footprint and offer approximately 90,000 customers in Belgium and 15,000 customers in the Grand Duchy of Luxembourg the high-quality services for which our company has already won acclaim. Following the BASE acquisition that was concluded in the beginning of the year, we have entered a new phase of growth and this acquisition is a next, very important step in this strategy. Our ambition is to have the best networks (fixed and mobile) and the best services (landline and mobile telephony - high-speed Internet - digital TV) in Belgium. We are also very delighted to be able to launch our great services in the Grand Duchy of Luxembourg on our own network."
SFR BeLux at a glance
SFR BeLux is a subsidiary of Coditel Holding S.A., a subsidiary of Altice N.V. SFR Belux offers telecommunications services in Brussels (television, Internet, and landline telephony), where its cable network covers six municipalities. The company's cable network also covers the municipalities of Wemmel and Drogenbos in Flanders. SFR BeLux also operates the cable network of the intermunicipal company AIESH in the "boot of Hainaut". The company has over 90,000 customers in Belgium.
Information about the areas that are currently covered by the SFR network in Belgium: http://www.sfr.be/fr/eligibilite.
SFR BeLux also operates in the Grand Duchy of Luxembourg, where it has approximately 15,000 customers. Information about SFR Belux's network coverage in the Grand Duchy of Luxembourg: http://www.sfr.lu/eligibilite.
SFR BeLux has operated as an MVNO since the end of 2014, selling mobile telephone services under its own brand name using BASE's 2G, 3G and 4G mobile network.
 Former BASE Company NV, currently known as Telenet Group BVBA
 The estimated 2016 Adjusted EBITDA (as customarily defined by Telenet) of 45.7 million under EU IFRS is based on SFR BeLux management's forecasts, as adjusted by Telenet management
 Projected annual run-rate synergies by 2021 are split evenly between (1) incremental EBITDA derived from revenue-related synergies and (2) cost-related synergies and are based on Telenet management's assumptions