Portobello Capital carves out BT's Spanish business

Alessia Argentieri
17 December 2019

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Madrid-based private equity firm Portobello Capital has carved out the Spanish business of British Telecommunications (BT)

The deal includes the Spanish ICT services and the local network infrastructure managed by BT, which is composed of a 5,600km owned-and-leased fibre optic network, as well as fully-owned city fibre networks in Barcelona and Madrid, and three data centres.

Following the acquisition, the unit will be led by members of the current management team.

Portobello is currently investing via its Portobello Capital Fondo IV, which closed on €600m in December 2017, surpassing its €570m hard-cap. The vehicle invests in Spanish mid-market companies operating in a variety of sectors, with enterprise values of €50-500m. It deploys equity tickets in the €10-100m range. In addition, Portobello manages the portfolio of its Fund III, which closed on €375m in August 2014, as well as a secondary vehicle, Portobello Capital Secondary Fund.

Following the sale of its Spanish unit, BT intends to retain a presence in Spain with offices in Madrid and Barcelona, and access points for its global network and its cybersecurity operations centre. The Spanish business will also become a reseller of BT's global products under a resale agreement.

According to BT, the sale is part of the ongoing transformation of its global unit, focused on delivering next-generation networking, cloud and security services to multinational customers.

Company
BT's Spanish business provides networking services to around 600 companies, including several businesses listed on the Ibex-35 index. The unit generated revenues of around £230m in the 2018/19 financial year.

People
BT Global – Bas Burger (CEO).
Portobello Capital – Luis Peñarrocha (founding partner).

Advisers
Equity – Natixis Partners (corporate finance); Jones Day (legal); KPMG (tax); Oliver Wyman (commercial due diligence).
Company – Credit Suisse (corporate finance); Allen & Overy (legal); EY (commercial due diligence).