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United Internet to buy rest of Versatel for EUR 586 mln

2014-09-03 09:21:00| Telecompaper Headlines

(Telecompaper) United Internet has agreed to buy the rest of Versatel from private equity fund KKR. United Internet acquired 25.1 percent in Versatel at the end of 2012 and will pay EUR 586 million cash for the remaining 74.9 percent. The company will take out new loans to finance the takeover, as well as the repayment of Versatel's EUR 361 million in bank facilities. The acquisition gives United Internet the second-largest fibre network in Germany, extending around 37,000 km to 226 cities, including 19 of the 25 largest cities in the country. Over 5,000 buildings are connected directly to the network, and Versatel also has around 440,000 DSL connections. This raises United Internet's DSL customer base to 4.12 million, strengthening its position as the second-largest provider in the market. Versatel is expected to generate revenues of EUR 548 million and EBITDA of EUR 164 million this year, as well as free cash flow of EUR 79 million. Its current management will remain in place, and the Versatel brand will be retained. United Internet plans to strengthen the company's B2B business, as well as serve corporate customers more under its own brand 1&1. Sourcing DSL pre-services produced by Versatel will also save the group around EUR 55 million per year.

Tags: internet buy united eur