Apax France, Fortino back Vodafone Malta, Melita merger

The transaction, which is expected to close during H2 2017, combines mobile operator Vodafone Malta with Melita, a cable, broadband and pay-TV provider. It will result in a network covering 99% of Malta's households. The combined entity will operate under the Vodafone brand.

The deal values Vodafone Malta at an enterprise value of €208m, representing a 6.8X EBITDA multiple, while it values Melita at €298m, representing a 8.9X EBITDA multiple. 

Upon completion, Apax and Fortino Capital – which have backed Melita since 2016 – will own 51% of the combined company, while Vodafone Europe will own the remaining 49%. The combined company's net debt should amount to around €345m, and Vodafone will receive an estimated cash payment of €120m, which will be used for general corporate purposes, Apax said in a statement. Apax and Fortino will meanwhile receive an estimated cash payment of €33m.

As part of the agreement, Melita's current CEO Harald Rösch will become CEO of the combined entity, while Vodafone Malta's CFO Caroline Farrugia will also step up as general CFO for the new group. Vodafone Malta's current CEO, Amanda Nelson, will soon be assigned another role, Apax added.

Previous funding
In February 2016, Apax invested alongside Fortino to acquire Melita in a secondary buyout transaction. Enterprise value was not disclosed, unquote" reported at the time, though the company's previous buyout was worth €160m. GMT Communications Partners, MC Venture Partners, Blackrock Communications and Gasan Group were vendors in the transaction. BNP Paribas arranged a €175m package of debt funding to support the deal. 

According to unquote" data, GMT partners took a majority stake in the group in 2007. GE Capital acted as lead mezzanine provider on the deal. 

Company
Established in 1992, Melita is a provider of converged telecoms services, including pay-TV,  broadband, fixed telephony, mobile and B2B services. The company is headquartered in Mriehel, Malta. For the year 2016, the company reported a €33m EBITDA. It had generated sales of €60m the previous year. 

Founded in 1989, Vodafone Malta is a Vodafone Group subsidiary. It employs an estimated 319 people and generates €30m of EBITDA.

Advisers
Company – Akira Partners (legal); DLA Piper (legal); Linklaters (legal). 
Equity – Lazard (corporate finance); Weil Gotshal & Manges (legal); Jones Day (legal).

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