BT has established an agreement with its three joint venture partners in Albacom to increase its ownership in the company to 100%. BT will acquire the 74% that it does not already own, from ENI, BNL and Mediaset, for a minimum price of 116m.
100% ownership will allow BT to offer a seamless service to its customers in Italy, both domestically and internationally, taking full responsibility for products delivered on an end-to-end basis. BT said it expects the transaction to bring visible benefits to Albacoms customers, allowing them to benefit from the full suite of BTs products and services and its increased focus on network-based IT services.
This move reflects BTs strategy of establishing a pan-European presence to service multi-site organisations, with strong local operations in key countries. Together with its recently announced acquisition of Infonet, the integration of Albacom will allow BT to provide an unmatched service to corporate and public sector customers in Italy and to international businesses with operations in Italy.
Under the terms of the transaction, BT has agreed with each of ENI, Mediaset and BNL that BT will manage a substantial part of their communications services needs for at least the next five years. The total annual value of these contracts is expected to be at least 150m.
Albacom will undergo a financial restructuring as part of the transaction. Each existing shareholder will settle directly its share of Albacoms outstanding bank loan balance. BTs 26% of this will be 65m. Albacom will retain existing long term lease obligations of 230m.
In consideration for the 74% of Albacom not already owned, BT will pay to the other shareholders a minimum of 116m. Of this, 55m will be deferred for five years and may be increased if Albacoms profits in 2008/09 exceed certain target levels. In the event that the final payment does increase, the total cost to BT including debt will not exceed 4x 2008/09 ebitda.
BT expects to generate annual cash cost savings of at least 20m in Albacom through the application of BTs international best practice processes and through improved purchasing power. The restructuring process, which has already commenced, will be led by Corrado Sciolla, who was appointed CEO of Albacom in March 2004.
The transaction, which is conditional only upon regulatory clearances, is expected to complete in January 2005. BT was advised on this transaction by Deutsche Bank.
Notícias – Press-Releases