KKR makes takeover bid for Versatel

Diana Petrowicz
19 May 2011

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Global private equity house KKR has made a voluntary public takeover offer worth €242m for telecommunication service provider Versatel.

The company, which is currently listed on the Frankfurt stock exchange, has agreed with KKR and its main shareholders on a price of €5.50 per share. The firm has a net debt of €349.5m net debt, giving an enterprise value of approximately €591m

The firm's largest shareholders Apax Partners, Cyrte Investments BV and United Internet AG have signed a binding agreement with KKR to sell their shares. The three owners represent 92% of the total issued and outstanding shares of Versatel. KKR has also secured 5% of shares from other shareholders and is planning to take the company private. The transaction is subject to approval from antitrust authorities.

The remaining shareholders will be able to trade their shares against a cash consideration of the average stock exchange price of the company's shares during the last three months. However, the offer price will not be less than €6.70 per share, constituting a premium of approximately 22% compared to the price received by the main shareholders.

KKR was attracted to Versatel as it represents a leading brand with a strong fibre network asset base which makes it a unique business within the European telecom sector. The investor is planning to strengthen the firm's market position and turn it into a preferred network-partner in the wholesale and business telecom segments in Germany.

Apax Partners acquired a majority stake in Versatel for €565m in 2005. On 27th April 2007 Versatel was listed on the Frankfurt stock exchange. A total of 24.850.000 shares - with a further 3.727.500 shares for a greenshoe option - were offered publicly.

Bookrunners are Credit Suisse Securities Ltd, JP Morgan Securities Ltd and Deutsche Bank AG while Hans Wilhelm Weber Wertpapierhandels GmbH is the lead broker.

Berlin-based Versatel was founded in 2005 and is a provider of telecommunication and data services for business and private customers. The business employs about 1.340 people and operates in 170 cities in Germany. In 2010, the company has a turnover of €725m representing a fall of 1.4% compared to the previous year.