Sun, Dec 25, 2011 - Page 11 News List

France Telecom sells mobile-phone unit Orange Swiss to Apax for US$2.1 billion

Bloomberg

France Telecom SA agreed to sell its Swiss mobile-phone unit to Apax Partners LLP for 1.6 billion euros (US$2.1 billion).

The deal is subject to approval by Swiss authorities and will be submitted to France Telecom’s board the week of Jan. 9, according to a statement. Apax, the London-based buyout firm, beat out bids from EQT Partners AB, Providence Equity Partners Inc and French telecommunications billionaire Xavier Niel, two people with knowledge of the situation said on Friday.

France Telecom is shedding assets in Europe, where multiple telephone companies are vying for a shrinking pool of new customers, to embrace faster-growing markets in Africa and the Middle East.

The Paris-based mobile operator, France’s largest, is also in talks to sell its Orange Austria unit to Hong Kong-based Hutchison Whampoa Ltd (和記黃埔), people familiar with the situation said in October, and is planning to exit Portugal.

FRENZY OF DEALS

Apax, run by Martin Halusa, has participated in more than 20 deals this year, including last month’s purchase of US wound-treatment company Kinetic Concepts Inc, its largest this year, according to Bloomberg data. The firm has amassed about half the 9 billion euros it is seeking for its latest fund, three people with knowledge of the plans said this month.

Orange Switzerland, founded in 1999, had revenue last year of 1.3 billion Swiss francs (US$1.39 billion). The company, which employs about 1,200 people, had a customer base of 1.6 million at the end of September, according to the statement.

VALUE

The value of the deal is 6.5 times Orange Switzerland’s estimated earnings for this year before interest, taxes, depreciation and amortization, France Telecom said in the statement.

That compares with a median EBITDA multiple of 5.6 paid for Western European telecommunications assets in the last three years, according to Bloomberg data.

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