Vodafone acquires Grupo Corporativo Ono

Karin Wasteson
17 March 2014

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Vodafone has agreed to acquire private equity-backed Spanish broadband operator Grupo Corporativo Ono for €7.2bn.

The deal, which will complete in Q3 2014, will see Vodafone wholly acquire Grupo Ono for a total consideration equivalent to €7.2bn.

The transaction values Ono at a multiple of 7.5x its 2013 EBITDA. Vodafone will finance the transaction from its existing cash resources and undrawn bank facilities.

unquote" first reported that Vodafone was in talks to acquire Ono in January. However, Ono had stated its dedication to pursuing an IPO this year. In late January, the firm filed documents with the Spanish regulator to pursue a flotation, rejecting the advances of both Vodafone and Liberty Global, which had expressed an interest in the asset.

The combination of Vodafone and Ono will create an integrated communications provider in Spain.

Previous funding
Ono received a €200m equity injection from its backers Providence Equity Partners, Thomas H Lee Partners, Quadrangle Capital Partners and GE Structured Finance in 2010, according to unquote" data.

The new capital consisted of €125m in cash that was injected into the company immediately via a deeply subordinated payment-in-kind loan. The firm also received the approval of 80% of its 79 senior lenders for a refinancing plan. The remaining €75m was to be held in an escrow account and subject to liquidity tests.

Company
Ono is a provider of high-speed broadband, pay-TV and fixed communications in Spain. Its network offers fixed and mobile communications and television services to around 1.9 million customers in 13 of Spain's 17 regions.

Ono reported revenues of close to €1.5bn in 2013 as well as an EBITDA of €680m. Ono employs around 2,500 people.

People
Vittorio Colao is group chief executive at Vodafone. José María Castellano Ríos is chairman of Ono's board of directors.

Advisers
Acquirer – Morgan Stanley (Corporate finance); Robertson Robey Associates (Legal).