Masmovil Group is buying, Lycamobile España, the virtual mobile operator, which will allow it to strengthen its position in the prepaid segment, in which it already has an important presence after the purchase of Llamaya and Lebara, and to continue leading the growth of the telecommunications market in Spain.
Masmovil will pay €372 million cash for Lyca on a debt free transaction basis. The payment will be spread over three instalments of €307 million to take place at closing, €30 million in six months after closing and a final payment of €35 million twelve months after closing. This will result in an initial EV/EBITDA-CAPEX multiple of 8.2x pre-synergies and c.5x post-synergies, without a significant impact on the Group’s financial leverage.
The transaction will be financed by bank debt that has been committed by two leading international financial institutions. The acquisition is subject to the authorisation of Antitrust Authorities.
Lyca is a virtual mobile operator specialised in the prepaid segment that started operating in Spain in 2010. By the end of last year, it had around 1.5 million lines, with an average ARPU slightly above €7. In 2019, Lyca generated revenues of €132 million with an EBITDA of €45 million. It will generate important synergy savings that will reach €70 million in 2021.
The operation of Lyca is not expected to require any relevant additional capital expenditure for MASMOVIL, and thus the EBITDA generated by the transaction is expected to fully translate into Operating Cash Flow.
After the acquisition of Lyca, Masmovil Group continues to consolidate its position as the fourth operator in Spain with 10.4M clients and revenues of around €1.8 billion.
“We are very pleased to incorporate Lyca into our Group as it fits perfectly into our commercial strategy. We will continue to work on creating value for our customers and for the telecommunications market. We welcome Lyca’s clients and I hope that they will soon be able to enjoy the advantages of belonging to Masmovil Group”, said Meinrad Spenger, CEO of Masmovil.