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Private equity groups, Cinven and Warburg Pincus, will combine Casema, the Dutch cable operator, with Warburg Pincus’ stake in rival Multikabel, driving forward consolidation in the Dutch cable television sector.
The deal, valued at €2.85bn ($3.57bn) including net debt, brings together the third and fourth largest cable companies in the Netherlands to form an operator serving more than 1.6m customers and increases the pressure on incumbent telecoms company, KPN.
KPN is trying to shore up sales with new internet-based services to counter the decline of fixed-line telephony, while fighting off competition from cable operators offering telephony.
For Warburg Pincus, it is the second acquisition in the Dutch cable sector in six months. The group in December last year bought Multikabel, a smaller cable company with about 300,000 subscribers in northern Holland.
”Having worked closely with the Multikabel team to build a strong market position and to deliver quality service in the Dutch market, we are excited by the opportunity to bring together Casema and Multikabel and participate in the transformation of one of the most advanced telecommunications markets in Europe,” said Joseph Schull, a Warburg Pincus managing director.
The price of about €2.1bn for Casema is more than three times what its previous private equity owners, the Carlyle Group, Providence Equity Partners and GMT Communications, paid for it in January 2003.
The sale attracted interested from numerous buy-out groups. Also in the running for the company were BC Partners, Macquarie Bank and Liberty - the US investment group that owns UPC, the market leader in the Dutch cable sector.
It is likely to prove a prelude to the sale of Kabelcom, owned by Dutch energy utility Essent and the second-largest operator with 1.8m subscribers. That process is drawing to a close and is said to have attracted some of those who chased Casema.
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