UAE’s e& eyes further expansion, acquires Czech PPF Group’s telecom assets

Image: e& Group

UAE’s e& signed an agreement with PPF Group to acquire a controlling stake in PPF Telecom’s assets in Bulgaria, Hungary, Serbia, and Slovakia.

The transaction, not associated with related parties, will be financed by debt. Once the transaction is closed, e& will fully consolidate the acquired assets under its international vertical, the company said.

Completion of the transaction remains subject to regulatory approvals and certain closing conditions.

PPF Telecom comprises Yettel Bulgaria, Yettel Hungary, Yettel Serbia, and the O2 Slovakia service operations as well as the CETIN and O2 Networks infrastructure businesses in these countries.

The East European telecom company serves more than 10 million customers and enjoys leading positions in its markets.

PPF Telecom posted combined revenues and EBITDAaL (earnings before interest, tax, depreciation and amortisation, and after leases totalled EUR1.8bn and EUR0.7bn respectively in 2022.

Read: Abu Dhabi’s e& enterprise concludes majority stake acquisition in Beehive

e& and PPF Telecom agreement highlights

The upfront consideration for the acquisition is EUR2.15bn in exchange for a 50 per cent+1 share economic stake in both the service and infrastructure companies (except for Hungary where Corvinus owns a 25 per cent stake in the respective businesses).

The transaction is also subject to up to EUR350m in earn-out payments if PPF Telecom exceeds certain financial targets within the three year period after closing and is subject to a claw back of up to EUR75m if such financial targets are not achieved. In addition, PPF has a put option for its remaining stake in PPF Telecom exercisable five years after closing and e& would have a reciprocal call option, according to a published statement.

The transaction represents an incremental of approximately 14 per cent and 11 per cent of e&’s total revenues and EBITDA, respectively based on FY 2022 financials, while e&’s telecom portfolio will increase to 20 countries.

In other news, eSIM marketplace Airalo has raised $60m in a Series B fundraising round led by e& capital, the telecom group’s investment arm, bringing the company’s total funding to $67.3m.

Airalo said in a statement that the latest fundraising also received equity participation from Antler Elevate, Liberty Global, Orange, T.Capital, Rakuten Capital, Singtel Innov8, Telefónica Ventures, Sequoia Capital India and Peak XV Partners, KPN Ventures and I2BF Global Ventures.

This transaction is consistent with e&’s strategic ambition to accelerate international growth and diversify into new geographies, including the CEE region.

Read: e& Group’s Q2 profit jumps 3.8% to $681m on subscriber growth