Liberty Global to buy German cable TV operator Kabel BW for $4.48bn
Liberty Global (NASDAQ:LBTYA) (NASDAQ: LBTYB)(NASDAQ: LBTYK) said Monday it has agreed to acquire Germany's third largest cable operator, private equity-backed Kabel BW Erste Beteiligungs (KBW), for EUR3.16 billion ($4.48 billion).
Colorado-based Liberty said the purchase price is about 8.1 times what it believes KBW's EBITDA will be in 2011 under the International Financial Reporting Standards. The multiple is adjusted for the deal's expected synergies.
KBW, controlled by Swedish-based private equity company EQT, provides television, broadband internet and telephone services in the German state of Baden-Wurttemberg. As of December 31, KBW's broadband communications network had 2.4 million customers.
"This transaction provides us with further access to one of the fastest-growing cable markets in Europe and is fully aligned with our strategy of acquiring world class cable operations that are accretive from a value and growth perspective," said Liberty's CEO, Mike Fries.
Together with Liberty's existing Unitymedia operation, which has 4.6 million customers in Hesse and North Rhine-Westphalia, Germany will become its largest European market, Fries added.
Under the deal, Liberty will also assume the EUR2.25 billion ($3.19 billion) of new debt to be issued by KBW as part of its recapitalization.
The transaction, subject to regulatory approval, is expected to close in the second half of 2011.
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