Malone Buys Belgian Wireless

Telenet Buys Country’s 3rd Largest Carrier For $1.4 Billion

John Malone’s Liberty Global subsidiary Telenet is making a push into Belgian wireless, agreeing to acquire that country’s third largest mobile carrier, Base Co., in an all-cash deal valued at $1.4 billon.

The buy is Telenet’s first in the Belgian wireless market – it had previously concentrated on MVNO agreements for its wireless offerings.

In a statement Liberty Global CEO Mike Fries said the deal “represents a cost-effective and unique opportunity to expand Telenet’s mobile and fixed business in Belgium.”

Telenet estimates that the deal, valued at about 4.2 times operating cash flow, will be accretive to shareholders and that the larger Telenet can easily absorb the Base business. Telenet is the largest cable operator in Belgium with about 2.1 million customers and annual revenue of $2.3 billion.

In his statement, Fries added that the Base acquisition is not a shift in strategy. “Elsewhere in Europe we will continue to focus primarily on our existing MVNO arrangements and rapidly developing WiFi networks to provide seamless mobile voice and data services to our customers,” Fries said in the statement.

Telenet has been an active player in Belgium's mobile market through an MVNO since 2006, and has grown its mobile subscriber base to 895,000 at year-end 2014. Base has about 3.3 million mobile subscribers and reported 2014 revenue of $741 million.

Telenet expects to spend about $258 million to upgrade Base’s mobile network and support systems and to integrate its operations over the next few years. Telenet intends to finance the acquisition of Base through a combination of $1.07 billion of new debt facilities and existing liquidity.