O’Hare’s Zegona to Buy Spain’s Telecable for $705 Million

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Former Virgin Media executive Eamonn O’Hare’s investment company agreed to buy broadband provider Telecable de Asturias SA for 640 million euros ($705 million), adding to a flurry of telecommunications deals in Spain.

The investment firm, Zegona Communications Plc, plans to finance the acquisition from Carlyle Group and Liberbank SA with 251 million pounds ($390 million) in new equity, proceeds from its initial public offering as well as a new debt facility arranged by Goldman Sachs Group Inc., it said Monday.

Telecable, founded in 1995, has more than 162,000 residential and corporate clients and 131 million euros in revenue in 2014. The Oviedo, Spain-based company provides television, landline, mobile-phone and broadband services.

Spain’s phone and Internet providers are merging to cut costs and expand as demand for online access increases. Euskaltel SA, another regional cable operator, held an initial public offering this month and agreed to buy R Cable y Telecomunicaciones Galicia SA, which also operates cable services in the north of Spain. Last year, Vodafone Group Plc acquired Grupo Corporativo Ono SA and Orange SA bought Jazztel Plc.

Zegona shares rose 13 percent to 153 pence at 9:05 a.m. in London and are up 28 percent since its IPO in March. O’Hare and partners created the company with the goal of buying companies valued at as much 3 billion pounds to subsequently restructure and sell them.

Rapid Consolidation

O’Hare was Virgin Media’s chief financial officer for about four years, helping to sell the company to Liberty Global Plc in 2013. Before that, he was the U.K. finance chief of retailer Tesco Plc.

The Telecable deal gives the Spanish company an enterprise value of less than 10 times its annual earnings before interest, taxes, depreciation and amortization, O’Hare said in a phone interview.

“It gives us a chance of buying and making them better, and it gives us a seat at the table as Spain consolidates very rapidly,” O’Hare said. “Telecable walks and talks like a small version of Virgin Media.”

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