Investindustrial, Trilantic Take Cable Stake

Target: Euskaltel

Price: $261 million

Sponsors: Investindustrial, Trilantic Capital Partners

Sellers: Kutxabank, Iberdrola, Endesa, Mondragon

Buyout groups Investindustrial and Trilantic Capital Partners have bought almost half of Spanish cable operator Euskaltel, the market leader in high-speed broadband in the industrialized Basque region, sister news service Reuters reported.

Investindustrial, a buyouts group backed by Italy’s Bonomi family, and former Lehman Brothers private equity arm Trilantic, said they had bought a 48 percent stake in Euskaltel, which has 45 percent of the broadband market in its region. The purchase price was not disclosed, but exceeds €200 million euros ($261 million), the buyers said.

Investindustrial said Euskaltel, which offers fixed and mobile telephone, internet and television through cable, has significant room to improve its profitability. Euskaltel posted EBITDA of €131 million last year on sales of €334 million.

Operators such as Euskaltel and fellow telecom group R, in the northern region of Galicia, have built niche markets by rolling out cable networks to local businesses and households. Nationally, only Spanish firm ONO and listed operator Telefonica offer optical fiber networks.

Kutxabank, a Basque region savings bank, sold a 10 percent stake in the deal, keeping 49.9 percent of Euskaltel. It said the entry of new shareholders was driven by accounting and regulatory issues after its merger with two other lenders—BBK and Vital—left it with 68 percent of Euskaltel. Spanish media reported Euskaltel has been seeking fresh capital after being ordered to pay €222 million to Orange in a legal dispute.

In the deal, a number of Basque government-related groups sold a 19 percent stake, Spanish utility Iberdrola sold 8 percent, retaining 2 percent, Endesa sold 9 percent and solar panel maker Mondragon sold 2 percent.

(Simon Meads is a correspondent for Reuters in London; Sarah Morris and Robert Hetz are correspondents for Reuters in Madrid.)