Telia Company has agreed to sell its 76.6 percent holding in the Spanish operator Yoigo to Masmovil, one of the leading mobile operators in Spain.
The transaction price is based on an enterprise value for Yoigo of EUR 625 million, of which Telia Company’s 76.6 percent share corresponds to EUR 479 million. The agreed price implies an EV/EBITDA multiple of approximately 8.1 based on Yoigo’s 2015 results. The divestment is estimated to generate a capital gain of more than SEK 4 billion and, following debt adjustments, the transaction is expected to reduce net debt for Telia Company by approximately SEK 6 billion. Capital gain and impact on net debt are subject to timing of closing of the transaction and FX movements.
“The divestment of Yoigo is an important milestone in our ambition to increase focus on our operations in the Nordics and Baltics. I am happy that we have an agreement with Masmovil, who will be able to leverage a small but great and agile team into a combined unit, creating an even stronger challenger in the Spanish market,” says Johan Dennelind, Telia Company’s President and CEO.
Yoigo has approximately 3.3 million subscriptions and a market share of 7 percent in Spain. Sales in 2015 were approximately SEK 8 billion. As part of the transaction, the minority owners ACS (17.0%), FCC (3.4%) and Abengoa (3.0%) will continue to have exposure to the combined entity. Telia Company, and the minority shareholders, are entitled to a break-up fee of EUR 30 million if the transaction would not be completed.
Publicly listed in Spain since 2012, Masmovil is an integrated telecommunications operator which provides universal telecommunications services to multiple market segments. It serves close to 1 million residential customers and 26,000 enterprises and is interconnected to more than 150 operators.
The deal is subject to approval from the Spanish competition authorities and is expected to close during the third quarter of 2016.