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Acquisition expands European operations to over 22 million franchise homes
Evercore Capital Partners and CDP Capital Communications lead private equity financing
Brussels/London, 2 April 2001 – Callahan Associates International LLC (Cable Partners), the global communications development and operating company, announced today that it has successfully closed its acquisition of the majority interest in Telenet, acquiring 54.2 per cent of Telenet, the cable communications company in Belgium. The investors in Telenet are Callahan Associates, together with its investment partners, Evercore Capital Partners L.P., CDP Capital Communications and Merrill Lynch Ventures. The existing owners of Telenet, who are comprised of the GIMV, a consortium of local financial institutions, the ten "mixed" Intercommunales and the six "pure" Intercommunales, will maintain a significant ownership interest in the company. The business franchise, passes more than 2.4 million homes (90 per cent of Flemish households), of which 2.2 million are CATV subscribers (with a penetration of up to 95 per cent). It supplies cable services to Flanders, one of Belgium's most prosperous regions, home to 6 million people, 58% of the Belgian population and one of the highest population densities in Europe.
Telenet's headquarters will remain in Mechelen, Flanders. The company's priority will be to offer innovative new services and enhanced customer support, to improve and expand distribution channels and to provide residential and business customers a world class interactive environment.
Some 75% of the broadband network has already been upgraded by the existing shareholders and enables high speed Internet, data, direct access telephony and digital television services, which enjoy high levels of take-up. Plans for the introduction of a digital TV pilot are already under development.
Alex Brabers, Executive Vice President of GIMV commented: "I am convinced that our selection of Callahan as managing partner is the right one for the Flanders region. Callahan has the comprehensive know-how and experience, which is clearly demonstrated through the success of its operations. Callahan also shares our view on how to develop the cable business into a multi-media network."
Andy Sukawaty, President and COO of Callahan Associates, said: "The conclusion of this transaction is tremendously exciting for us. We will partner with the GIMV, Intercommunales and our Belgian financial consortia, to develop product to benefit the Flanders community. Flanders leads Europe in the provision of broadband capacity and broadband is the oxygen of the Internet. We will develop our broadband communications business with Telenet, based on our current experiences in our operations in Germany and Spain. Our approach here will reflect what we've done there: create a truly local company, which will be a leader in investment in multimedia projects in the region."
Etienne Blomme Chief Operating Officer of Telenet, who will oversee the development of the operation added: "We look forward to an advanced and broadband future with our colleagues at Callahan. Flanders leads Europe's future in broadband service with this move".
Merrill Lynch acted as lead adviser to Callahan Associates in this transaction.
Callahan Associates has already established successful European cable partnerships in Germany and Spain. The operation in Flanders will provide customers with a wide range of digital services, maximising economies of scale and bringing the total number of franchise homes served by the company in Europe to over 19 million, with some 15 million homes passed and almost 9 million CATV subscribers. Callahan executives from all operations will work closely to leverage their joint experience, industry relationships and commercial position.
Callahan - Telenet Cable Transaction: advisors
Merrill Lynch International
Lead Financial Advisor to Callahan Associates
Squire, Sanders & Dempsey
Lead Legal Counsel to Callahan Associates
Simpson, Thacher & Bartlett
Legal Counsel to Evercore Partners
Baker & McKenzie
Legal Counsel to the Sellers
Allen & Overy
Legal Counsel to the Lenders
Coudert Brothers
Legal Counsel to Callahan Associates
Dresdner Kleinwort Wasserstein
Financial Advisor to the Existing Shareholders
CEA
Sub advisor on private equity to Callahan Associates
Callahan - Telenet Financing
Merrill Lynch
KBC Bank NV
JP Morgan
NIB
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