France Telecom to increase its stake in Orange Romania

France Telecom to increase its stake in Orange Romania

Paris, April 14, 2005

France Telecom announced today the signature of an agreement with a group of minority shareholders in Orange Romania to acquire their shares for a total cash consideration of US$ 523 million corresponding to a 2004 EBITDA multiple of 4.8. Following the transaction, France Telecom indirect stake in Orange Romania will increase from its current level of 73.27% to 96.63%.

This transaction enables France Telecom and Orange to consolidate their position in one of their key assets with high growth prospects.

With
- 48% of market share,
- revenue growth of 47% (between 2003 and 2004) and
- an EBITDA margin of 54%, Orange Romania is a leader in its market. (very-very close,
Shoulder to shoulder with CONNEX – the future VODAFONE operator in Romania)

Sellers include a consortium of financial investors led by AIG New Europe Fund, a US$ 320 million fund managed by an affiliate of AIG Capital Partners. Other members of the consortium include Polish Enterprise Fund L.P. and Polish Enterprise Fund IV L.P. managed by Enterprise Investors, Innova/98 L.P. managed by Innova Capital, Communications Venture Partners, BancBoston capital, now part of Bank of America and Société Générale Romania Fund; and Alcatel NV. Sellers were advised by Ph. Villin Conseil and Edmond de Rothschild Corporate Finance.

As someone observed today, with this transaction, Orange Romania is valued at US$2.2 - 2,5 bn or US$450 -500/user. (less than VODAFONE payed for CONNEX)



As you remember and can read HERE
Vodafone paid 3.5 billions Dollars + 0,9 billion Dollars (in assumed debts)= 4,4 billions $ for both CONNEX and OSKAR (Connex’s sister company in the Cech Republic)…

I wonder what’s the Wats ORANGE’s REAL MARKET VALUE?! Let’s learn something from the VODAFONE deal with Connex:

Vodafone bought 79% stakes from Mobifon, because they already owned 20%... If these 79% could be around 2-2.5 Billions $ it means that the MARKET VALUE of CONNEX is at least 2,5 if not 3 billions Dollars.

Impressive, ha? ;-)


Connex has around 5 millions customers so, each CONNEX user value around 550 - 600$...

Here some details about CONNEX (and in the future VODAFONE) in ROMANIA:
mobile penetration of approximately 47%
- 4.9 million customers, equivalent to 48% market share
- revenues of US$723 million, delivering 30% growth year-on-year
- EBITDA of US$345 million with 48% EBITDA margin


There will be a fantastic fight between the GIANTS - Vodafone and Orange...and I hope that we, the clients will benefit the most from their 'duel'...



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