Eurofiber could see near term takeover interest – source
17 AUG 2018
Netherlands-based Eurofiber is expected to be the next sizeable target in the wave of fibre consolidation, according to a source familiar with the situation and a sector banker.
It is being eyed by several potential buyers, with a sale expected this year or early 2019, the sector banker said. An approach could already be in the works, the source suggested.
The network provider was bought in 2015 by infrastructure-focused Antin for EUR 875m, at that time 11x EBITDA.
Eurofiber will appeal most to infrastructure funds, the source and banker said. Liberty Global [NASDAQ:LBTYA], Colt and BT [LON:BT.A] were identified as potential bidders during Eurofibre’s previous sale. It is also quite expensive, the sector banker said, ruling out similar sized strategics.
Critical communications companies are enjoying particularly high valuations due to a scarcity of assets, cheap debt financing and the desire for comprehensive networks, the source said. With the latter, the fibre industry has seen the combination of long-haul fibre with metro fibre, ensuring fast connections between and within cities, the source said.
Recent deals in the space include CityFibre’s acquisition by Connect Infrastructure, a consortium which includes Antin, at a premium of 92.9% to the day before the deal announcement. Gigaclear’s sale to infrastructure fund M&G Investment Management for GBP 270m constituted a 23% premium to its fund raise in 2017.
Fibre companies with extensive networks can easily command large multiples, the source said.
Antin did not respond to a request for comment. Eurofiber declined to comment.