Cinven has completed its successful IPO of Ziggo NV, the largest cable operator in the Netherlands, on the NYSE Euronext Amsterdam.
Cinven led the original investment in Ziggo in 2006 and retains a 27% shareholding in the business post-IPO. At close of trading on 26 March 2012, Ziggo ordinary shares were trading at a 21% premium to the issue price.
The Ziggo IPO initially generated total gross proceeds of EUR804 million, through the sale of 21.7% of the Company at EUR18.50 per share. The shares were priced at the top end of the range, reflecting the strong demand and giving an initial market capitalisation of EUR3.7 billion. The first day of dealings was 21 March 2012. In addition, the over-allotment option was fully exercised resulting ultimately in a free float of 25% of the issued share capital of 200 million shares. Total gross proceeds, including proceeds from the exercise of the over-allotment option, were EUR925 million.
Cinven identified the opportunity to create Ziggo in 2006 through a combination of three Dutch cable businesses – Kabelcom, Casema and Multikabel – building on its significant investment experience in the European cable sector
Kabelcom was acquired in August 2006 for EUR2.6 billion and Casema in September 2006 for EUR2.1 billion, alongside Warburg Pincus. These businesses were then merged with Multikabel to form Ziggo which created the leading cable operator in the Netherlands that now represents 56% of the Dutch cable market by homes passed
Cinven has considerable expertise of acquiring and integrating European cable assets through the formation of Numericable, a leading French cable operator created through a combination of several cable businesses between March 2005 to July 2006. It subsequently acquired Completel in September 2007 to form Numericable / Completel which continues to perform well
Cinven’s Netherlands team was instrumental in acquiring the Ziggo cable assets, particularly given its relationship with Essent, the owner of Kabelcom, thereby identifying Kabelcom as an investment opportunity prior to the sale of Casema
Cinven’s investment strategy was to consolidate the cable market in the Netherlands, realising substantial synergies from combining several of the leading operators and then to invest in the combined group to grow the business through higher quality services for customers. Over EUR1 billion was invested to upgrade the network and provide a best-in-class service.
Ziggo’s network covers 4.2 million homes in the Netherlands and the company has 3 million subscribers to its services. In the year to 31 December 2011, the Company delivered strong financial performance with revenues increasing by 7.4% to EUR1.48 billion, mainly driven by subscriber growth and higher average revenue per user (ARPU), and Adjusted EBITDA up 6.6% to EUR835 million.
David Barker, Partner at Cinven, says: “Cinven’s investment in Ziggo demonstrates the benefit of our considerable sector expertise, having already built a highly successful and substantial cable business, Numericable, in France through a series of acquisitions. At the same time, it reinforces the strength of our local European network to originate investment opportunities by identifying prospects before they come to market."
"Both the Ziggo and Numericable/Completel transactions underline our ability to execute complex transactions, to take advantage of market consolidation opportunities, and generate value for our investors. Ziggo has been a classic ‘buy and build’ investment. The Company has successfully grown revenues and margins whilst delivering improved services for customers. We have retained a significant stake in the business as we believe there is further value to be generated in the coming years.”
Bernard Dijkhuizen, CEO of Ziggo, says: “Without the vision, experience and entrepreneurial approach of Cinven and Warburg Pincus, Ziggo would never have seen the light of day. As a result of their commitment and support for continued investment in the business, Ziggo has been able to establish itself as a clear market leader with the most attractive product proposition in the Dutch market. Under their ownership, we have achieved significant growth and, as a result of capital expenditure in excess of EUR1 billion, we have laid a strong foundation for continued growth and cash flow generation, the benefit of which will now be shared with our new public investors.”
