Vodafone buys Spain's Grupo Corporativo Ono

17th Mar 2014 07:05

Vodafone has agreed to buy Grupo Corporativo Ono, Spain's largest next-generation network, for 7.2bn euros.The deal complements Vodafone Spain's network and will expand the company's reach in the European market.Vodafone expects to achieve cost and capital expenditure synergies with a run-rate of about €240m before integration costs by the fourth full year post completion. It is equivalent to a net present value of about €2bn after integration costs.The group estimates revenue synergies with a total net present value of approximately €1bn. Ono is valued at a multiple of 7.5x 2013 earnings before interest, tax, depreciation and amortisation (EBITDA) and 10.4x 2013 operating free cash flow, adjusted for cost and capital expenditure synergies.The transaction is expected to be accretive to adjusted earnings per share and free cash flow per share from the first full year post completion after cost and capital expenditure synergies and before integration costs. Vodafone Chief Executive Vittorio Colao said: "The combination of Vodafone and Ono creates a leading integrated communications provider in Spain and represents an attractive value creation opportunity for Vodafone. "Demand for unified communications products and services has increased significantly over the last few years in Spain, and this transaction - together with our fibre-to-the-home build programme - will accelerate our ability to offer best-in-class propositions in the Spanish market. We look forward to welcoming the management and employees of Ono to Vodafone and working together to serve our customers across Spain."RD