Zegona to buy Telecable

DetailsJuan Fernandez Gonzalez | 28 July 2015

Just days after Euskaltel's move to buy R Cable was announced, UK group Zegona Communications has acquired Asturia's regional operator Telecable, thus preventing Euskaltel from buying it to create a larger fibre operator in northern Spain.

In just one week, the Spanish cable scene has radically changed, moving towards market consolidation, not only inside the country, but also at a European level.

According to a note sent to the London Stock Exchange, Zegona will pay €640 million and expects to conclude the deal by mid-August. The group's move is backed by global investors, funds from Zegona's recent IPO and a debt facility carried by Goldman Sachs.

"There is a significant opportunity to continue the impressive development of the Telecable business," commented Zegona's chief executive Eamonn O'Hare. "By combining the local knowledge of the team in Spain with the international experience and track record of Zegona, we have the right leadership to drive Telecable forward and deliver its full potential."

"Zegona has the right capital structure in place to continue our company's growth and to cement our leadership position in the Spanish telecommunications market," added Alejandro Martínez Peón, Telecable's CEO. "After a period of continued growth supported by The Carlyle Group and Liberbank I firmly believe that this is the right step to reinforce Telecable's competitive position, bringing us a better future."

Telecable has been 85% owned by Carlyle since December 2011, when the asset management company bought it from Liberbank, which retained 15%.

"Despite the challenging economic climate, we worked tirelessly with Telecable's team. This ensured they delivered consistent year-on-year growth in terms of revenues, EBITDA, market penetration, while maintaining their technological and service leadership and minimal customer turnover," said Alex Wagenberg, managing director at Carlyle Europe.