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French incumbent adds two more countries and 5.5 million subscribers to its mobile customer base.
Orange agreed two more acquisitions in Africa on Wednesday, a day after agreeing to buy Cellcom Liberia.
The French incumbent has struck a deal to acquire Bharti Airtel’s operations in Sierra Leone and Burkina Faso, adding two more countries and almost 5.5 million mobile subscribers to its customer base.
Orange did not disclose the exact value of the transactions, stating that the combined annual revenue of Airtel Sierra Leone and Airtel Burkina Faso is approximately €275 million, and that Orange will pay the equivalent of 7.9 times Airtel’s EBITDA in these two countries.
"Assuming that the operations have EBITDA margins of 30% and given the implied multiple this acquisition would represent an investment of €652 million for Orange. However we note that this is just a mere exercise," said Haitong Research, in a research note.
"On the strategic side, we think this makes sense for Orange since it strengthens its presence in the AMEA region and allows it to enter two new countries."
Orange and Bharti Airtel first disclosed they were holding deal talks in July.
At the time, Orange said it was exploring the possibility of acquiring Airtel’s operations in Chad and Congo Brazzaville, in addition to Burkina Faso and Sierra Leone.
"The agreements regarding potential transactions in the remaining two countries have lapsed," Orange said in a statement.
Wednesday’s deal comes a day after Orange agreed to acquire Cellcom Liberia.
This week’s three acquisitions are in line with Orange’s international development strategy, under which the telco aims to grow revenues in the Middle East and Africa by 20% in 2015-2018.
