Liberty Global PLC (NASDAQ:LBTYK) reported that it has finalized a deal to sell its Austrian operations named UPC Austria to T-Mobile Austria. The company will sell UPC Austria for an aggregate enterprise value of around €1.9 billion, subject to customary working capital and debt adjustments at completion.
The sale price signifies a multiple of almost 11x UPC Austria’s projected 2017 adjusted segment OCF, as customarily stated by Liberty Global, or around 34x UPC Austria’s projected 2017 OFCF. Closing of the deal is subject to regulatory consent, which is not anticipated until 2H2018. As of the close of September 30, 2017, UPC Austria’s network boasted 1.4 million homes and served as many as 654,000 consumers who subscribed to 450,000 voice, 468,000 video and 513,000 broadband services.
Mike Fries, the CEO of Liberty Global, expressed that this deal signifies the financial and strategic value of their fiber-rich networks in a fast converging world and the considerable synergies essential in fixed-mobile mergers. They have operated in Austria for more than 20 years and are extremely delighted of the market-leading role they have built in both super-fast and digital video broadband. Looking forward, they consider the combination of T-Mobile Austria and UPC Austria will offer the national scale required to compete with larger firms like A1, and offer business and residential customers with the best quality services at the best price.
They continue to be focused on value creation for their shareholders and are delighted with the premium valuation being linked to one of their smaller operating markets. The sale proceeds are projected to be utilized for general corporate uses, which may comprise leverage decline for the remaining UPC bank group, support for the firm’s share repurchase program and re-investment into their business. Liberty Global has accepted to offer certain transitional services for up to four years.