Bulgarian incumbent Vivacom is once again for sale – the sixth time it will have changed hands since it was privatised in 2004.
It is being sold by Spas Roussev and the London arm of the Russian bank VTB, which paid EUR330 million for the company in 2015, after it defaulted on its debt. The company is now expected to be valued at around EUR1.2 billion.
According to reports in the FT, two interested parties have emerged. United Group, owned by BC Partners and KKR, is said to have bid EUR1.1 billion; while Providence Equity Partners has offered EUR1.05 billion.
The sale has been muddied, however, by legal action in the UK and Luxembourg courts by Empreno Ventures, which had a stake in the holding company that owned Vivacom that was wiped out by the debt default. Empreno claims the business was sold at an “artificially low price”.
Meanwhile, Swedish infrastructure investor EQT has bought German fibre co Inexio (30 September 2019), with reports saying it paid around EUR1 billion (although terms were not disclosed). The firm was founded in 2007 and has around 110,000 households and 6,000 businesses connected to its network, with a goal of connecting 2 million premises by 2030. EQT has stated it intends to grow Inexio, developing its network across Germany. EQT Partner Matthias Fackler is reported by Reuters as saying: “The potential is huge in this market”.
There is currently M&A activities taking place in Central and Eastern Europe (CEE), as companies seek to grow their market share and private equity firms invest in the market. The total value of telecoms M&A deals in Europe was USD69.6 billion in 2018, according to Mergermarket, with a January 2019 report by Mergermarket and Wolf Theiss saying that 99% of investors they surveyed would invest in CEE again.
Examples of Central and Eastern European deals
- PPF acquired Telenor’s telecoms business in the Balkans for EUR2.8 billion
- Liberty Global sold its operations in Germany, Hungary, Romania, and the Czech Republic to Vodafone Group for EUR18.4 billion
- KKR has put its German fibre business Deutsche Glasfiber up for sale
- United Group, Serbia’s largest cable company completed takeover of Tele2 in Croatia for EUR220 million
- Digi Communications acquired Invitel
