International cable operator Liberty Global is to acquire Germany's second largest cable company Unitymedia in a E2 billion deal. Unitymedia has systems in the German federal states of North Rhine-Westphalia and Hesse, which are among the most prosperous and densely populated regions in Europe.
Unity Media's cable footprint passes some 8.8 million homes, including ten of the twenty largest cities in Germany, including Cologne, DÃ¼sseldorf, and Frankfurt. At September 30th, 2009, Unitymedia reported approximately 6.4 million Revenue Generating Units (RGUs) (as defined by Unitymedia), including 4.5 million analogue and digital basic cable subscribers and 1.9 million new service RGUs (digital TV Pay, retail broadband internet, wholesale MMA Internet, and telephony).
Liberty Global is buying Unitymedia from its parent, which is owned by a group of shareholders led by BC Partners and Apollo. Together with Unitymedia's reported net debt at September 30th, 2009 of approximately E1.5 billion, the total consideration is approximately E3.5 billion, excluding transaction costs, and represents a purchase price multiple of approximately 7.4 times Liberty Global's estimate of Unitymedia's 2010 Adjusted EBITDA. Completion of the transaction is expected in the first half of 2010 and is subject to regulatory approval.
Mike Fries, President and Chief Executive Officer of Liberty Global said the deal complemented the operator's existing European footprint and had significant untapped growth potential in one of the fastest growing cable markets in Europe. “The addition of Unitymedia not only enhances our European presence, but adds significant scale to our global operations, as our footprint, including Unitymedia, will exceed 40 million homes.”
He added that Unity Media fitted Liberty Global's strategy of operating best-in-class cable systems, bringing an experienced management team, a significantly upgraded network, and a product suite that was well positioned to deliver superior value to its customers.