TDC Sells Swiss Sunrise for $3.2B

Danish incumbent sells Swiss operations to CVC Capital Partners as it prepares for an IPO

September 17, 2010

2 Min Read
TDC Sells Swiss Sunrise for $3.2B

Danish incumbent TDC A/S (Copenhagen: TDC) has sold its Swiss subsidiary Sunrise Communications AG to private equity firm CVC Capital Partners for 3.3 billion Swiss francs (US$3.24 billion). (See TDC Sells Sunrise.)

Earlier this year, TDC had agreed to merge sunrise with Orange (NYSE: FTE)'s Orange Switzerland, but that move was blocked by the Swiss regulator. (See FT, TDC Terminate Swiss Merger and FT, TDC to Merge Units.)

The French giant said it remained committed to the Swiss market, but TDC was determined to offload sunrise and refocus on the Nordic market in preparation for an IPO. (See FT: We're Committed to Switzerland.)

If the regulators approve this deal, CVC will find itself the owner of Switzerland's second-largest operator, behind national operator Swisscom AG (NYSE: SCM). sunrise had 1.9 million mobile, about 600,000 fixed voice, and 355,000 fixed broadband customers on its books at the end of June.

In the first six months of this year, sunrise generated 5.14 billion Danish kroner ($907 million) in revenues and DKK1.43 billion ($253 million) in EBITDA (earnings before interest, tax, depreciation, and amortization).

If the sale of sunrise goes through, TDC's current private equity owners are likely to float what's left of the Danish carrier's empire on the public stock markets. (See TDC Owners Shuffle Holdings and TDC Is Up to Something.)

The private equity group -- comprising Apax Partners , The Blackstone Group , Kohlberg Kravis Roberts & Co. (KKR) , Permira , and Providence Equity Partners -- formed the Nordic Telephone Company ApS and bid for TDC in late 2005. They completed the takeover and delisted the Danish carrier in early 2006. (See NTC Completes TDC Offer, TDC Unveils $12B Offer, and Eurobites: A Private Affair.)

Now they're looking to recoup some of their cash by offering TDC's stock to the public.

The sunrise deal is expected to be the first of many telecom services M&A deals in Europe in the next few years as the changing competitive landscape forces the region's operators, both large and small, to assess their near and long-term futures. (See Eurosqueeze?.)

— Ray Le Maistre, International Managing Editor, Light Reading

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