Equity Firms Take On KPN
The equity firms will add Kabelcom to their existing cable assets -- Casema NV , which they agreed to buy in July for €2.1 billion ($2.7 billion), and N.V. Multikabel , which Warburg Pincus acquired in December 2005 for €515 million ($659 million). (See Dutch Cable Carriers Merge.)
In a prepared statement, Cinven said that once the acquisition deals have closed, "Kabelcom, Casema and Multikabel will co-operate in providing cable services to the Dutch market," including TV, telephony, and broadband services that are sold to business as well as residential users. Together, the three operators have about 3.3 million customers, of which 1.14 million are broadband customers, and annual revenues (estimated for 2005) of €870 million ($1.1 billion). That will make it the biggest cable operator in the Netherlands.
Its chief rivals will be Dutch national operator KPN Telecom NV (NYSE: KPN) and Liberty Global Inc. (Nasdaq: LBTY), the pan-European cable operator that was also interested in buying Kabelcom, but which pulled out at the late stages of the bidding process.
Liberty Global's UPC Netherlands operation has just over 2.2 million customers (as of March 31), including just over 500,000 broadband customers. KPN has about 4.5 million residential customers, including nearly 2 million broadband users, and a further 1.8 million business customers.
KPN has launched IPTV and VOIP services to help combat the competitive threat from the cable operators, and is migrating to an all IP network to increase efficiencies and reduce costs. The incumbent recently announced second-quarter results that were slightly better than expected due to the strength of its mobile operations, and it raised its outlook for the year as cost savings are realized. (See KPN Reports Q2, KPN Launches IPTV, KPN Goes National With VOIP, and KPN Lays Out IP Migration Plan.)
Cinven, meanwhile, has also been acquiring cable assets in France. Earlier this year it bought Liberty Global's UPC France business for €1.25 billion ($1.6 billion), adding to its French and Belgian cable operations. (See Liberty Bails Out of France.)
— Ray Le Maistre, International News Editor, Light Reading