Italtel Confirms IPO Plan

Softswitch vendor ends years of speculation with plans to list shares in Italy in the first half of this year

February 28, 2006

2 Min Read
Italtel Confirms IPO Plan

Italian VOIP equipment and integration service firm Italtel SpA plans an IPO on the Italian stock exchange within the coming three to four months. (See Italtel Set for IPO.)

The move ends years of speculation and canceled plans, during which a number of potential takeover rumors came and went. The company's first IPO plan was shelved in 2000, when Telecom Italia (TIM) -- an Italtel customer and still the holder of a 19.4 percent stake in the firm -- sold its majority holding to a group of investors. (See Scuttlebutt: Italtel's Up for Grabs, Italtel Set for IPO, at Last, and Cisco et al Invest 1B Euro in Italtel.)

Now, though, the telecom market is healthier, VOIP is a mainstream service, and Italtel has registered significant success with telecom service providers, particularly in Europe. (See TP Picks Italtel, Cisco for VOIP, FastWeb Picks Italtel , Belgacom Picks Italtel, Cisco, and Marconi, Italtel Score at C&W.)

That success has propelled the Italian firm consistently into the top three ranked companies in the VOIP equipment market, according to market reports from a number of different research firms, and helped the company achieve a profit of €13.7 million (US$16.3 million) from revenues of €545.8 million ($651 million) in 2005. (See Dell'Oro: VOIP Gear Up and Italtel Gets the Softswitch Bronze.)

Now the company wants to reduce its debt, which stood at €322.2 million ($384 million) at the end of 2005, and expand into new markets. Italtel has hooked up with Accenture in a bid to break into the Latin American market but has, for the time being, shelved its plans to find a North American partner. (See Italtel, Accenture Team Up and Italtel: We Need US Partner.)

The company declined to say how much of its stock it plans to float, or how much money it hopes to raise, citing a pre-IPO quiet period. A report in the Italian media, citing unnamed sources, suggests Italtel plans to place between 40 and 45 percent of its capital on the Italian exchange and issue €200 million ($238 million) in new shares as well as selling some existing stock.

Telecom Italia is the second biggest stakeholder at present. The main owner is Clayton Dubilier & Rice Inc. , which holds 48.8 percent, while Cisco Systems Inc. (Nasdaq: CSCO), a close partner of Italtel's, owns 18.4 percent. Advent International owns 8.7 percent, Brera Capital Partners LLC holds 2.2 percent, and Italtel's staff owns 2.7 percent. (See Cisco, Italtel Get Closer.)

— Ray Le Maistre, International News Editor, Light Reading

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