Danish operator TDC has signed a deal worth €1.66bn to take over Norwegian TV and broadband provider Get, which will create Scandinavia's biggest cable TV company, with a customer base of 1.7 million connected homes.
TDC CEO Carsten Dilling described the takeover as the operator's "most significant investment in many years". Get provides services to more than half a million households, with the deal boosting TDC's existing 1.2 million base under the YouSee brand. TDC estimated that 29 percent of revenues will now come from its cable business but added it expected to grow this in the coming years.
Dilling said: "We have awaited this opportunity and see it as a natural and timely extension of our business and it marks an evolution of TDC Group into a leading Scandinavian provider of TV, home entertainment and high speed broadband on the cable platform. It is also a strategic move into the consumer market in Norway within an industry we know very well from having run our YouSee cable business in Denmark successfully for years."
Dilling said TDC's focus on large enterprises would dovetail with Get's focus on consumers and smaller businesses through its cable TV offering.. TDC also owns a fibre based transmission network. Dilling said: "Get and YouSee can commercially benefit from sharing best practices and collaborate within product development, innovation and content. On a more technical level, we can reap several synergies by combining our networks in a complete Norwegian infrastructure based on fibre and coaxial cables. On the business to business market, we will over time be able to offer the same broad product portfolio as TDC Group in Denmark."
The acquisition, from Get's owners GS Capital Partners and Quadrangle Capital Partners, will be funded through debt, with TDC lowering its dividend payout to around 60 percent of equity free cash flow.
Get CEO Gunnar Evensen will continue in his role following the completion of the takeover, which is expected to take place in the fourth quarter of this year following regulator approval. He will be responsible for designing how both companies will work together in order to maximise synergies.
Dilling said: "Get is a well-run business with world class, innovative products. It operates in an attractive market with large growth potential. This growth is underpinned by the very strong economy in Norway. With 2005 as the only exception Get has had two-digit growth rates since 2000 and is today among the most profitable on a European scale. The acquisition strengthens our cable TV business on a Nordic level as well as ensures a very strong presence on both the business and the consumer market in Norway for TDC Group."