German cable operator Tele Columbus has made yet another acquisition, this time in the form of smaller rival Pepcom, which it has agreed to buy from Star Capital in a deal worth €608 million.
Pepcom has 580,000 unique subscribers and its network covers 810,000 homes. It has a strong presence in Frankfurt, Leipzig, Munich and Nuremburg. As well as retail customers, the cableco also serves 1,600 businesses.
On the financial side, Pepcom generated revenue of €126 million and adjusted EBITDA of €57 million in 20 14.
The deal, announced on Sunday, is the latest in a string of cable acquisitions made by Tele Columbus recently.
In July, the company agreed to purchase PrimaCom for €711 million. A month earlier, Tele Columbus revealed it had bought various small cable operators in networks during the course of April and May.
The Pepcom deal will leave Tele Columbus with 3.7 million users. It is expected to generate annual synergies of €13 million and capex savings of €2 million within two years of the deal’s completion.
Tele Columbus hopes the added scale will help it compete more aggressively with Germany’s two biggest hitters: Vodafone’s Kabel Deutschland and Liberty Global-owned UPC.
The closure of the transaction is subject to Tele Columbus’ shareholders approving a €240 million capital increase. If that goes ahead, the Pepcom deal is expected to complete by the end of this year, or at the latest, 30 April 2016.
