HgCapital and CPS Partners invest close to £160 million to acquire Manx Telecom from Telefonica

HgCapital called on CPS Partners Friday for a £160 million telecoms acquisition. The UK private equity firm acquired the biggest share of Manx Telecom, by far the biggest telecommunications and internet services provider in the Isle of Man, for £158.8 million. The investment deal, under collaboration with the CPS Partners, an international telecommunications management company, will be completed by end of June.



The acquired company, Manx Telecom, a subsidiary of Telefonica, the third largest telecoms company globally after China Mobile and Vodafone, was the first company to launch 3G live services in the European continent. Manx Telecom had revenues of £69 million in 2009, while its earnings before interest, taxes, depreciation and amortization reached an impressive £25 million. The company intends to develop a strong telecommunications infrastructure that is hopeful to attract companies and investments to the Isle of Man and greatly improve its economy.




Alex King, HgCapital’s chief of TMT investments, underscored the Isle of Man’s sturdy economy saying that it boasts 25 years of steady GDP growth. He said that this acquisition was a growth investment for HgCapital and the company would continue to invest in supporting the organic growth of the business through the use of bolt-on acquisitions. This marked another investment consistent with the company’s strategy of supporting resilient growth companies.



Making a similar announcement, Telefonica announced that it had signed a definitive agreement with HgCapital and CPS Partners for the disposal of 100% of its subsidiary, Manx Telecom for about €190 million. It said that formal notice had been sent to the Isle of Man’s government and the purchase price implied a multiple of 6.3 times OIBDA for the year ended 31st December 2009.



Manx Telecom, based in the Island, is its largest telecommunications and internet provider offering a range of fixed line, mobile and data services to consumers and businesses. The company currently employs 300 people. This investment deal shows Telefonica’s commitment towards financial discipline and the management of the group’s portfolio assets that focuses on its resources on the largest markets, in which, Telefonica can take advantage of its scale, global position and its two commercial brands, Movistar and O2.



Telefonica Chairman and CEO said that the company was excited to have completed the agreement with HgCapital and CPS Partners as it provided clarity and certainty moving forward for all parties, whilst recognizing the value which has been built up in Manx Telecom over the years.

June 7, 2010.