France Telecom announced the signature of an agreement with a group of minority shareholders in Orange Romania to acquire their shares for a total cash consideration of US$ 523 million corresponding to a 2004 EBITDA multiple of 4.8. Following the transaction, France Telecom indirect stake in Orange Romania will increase from its current level of 73.27% to 96.63%.
This transaction enables France Telecom and Orange to consolidate their position in one of their key assets with high growth prospects. With 48% of market share, revenue growth of 47% (between 2003 and 2004) and an EBITDA margin of 54%, Orange Romania is a leader in its market.
Sellers include a consortium of financial investors led by AIG New Europe Fund, a US$ 320 million fund managed by an affiliate of AIG Capital Partners. Other members of the consortium include Polish Enterprise Fund L.P. and Polish Enterprise Fund IV L.P. managed by Enterprise Investors, Innova/98 L.P. managed by Innova Capital, Communications Venture Partners, BancBoston capital, now part of Bank of America and Société Générale Romania Fund; and Alcatel NV. Sellers were advised by Ph. Villin Conseil and Edmond de Rothschild Corporate Finance.
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