Apax group now exclusive for DT cable assets

Apax, Providence Equity Partners and Goldman Sachs Private Equity have agreed a E1.7bn price for the German telecom group’s cable television assets.

After a protracted round of negotiations,  Deutsche Telekom’s cable television has been sold to a consortium of private equity firms in a E1.7bn transaction.


A consortium of Apax Partners, Providence Equity Partners and Goldman Sachs Private Equity has agreed to pay an initial price of E1.725bn to Deutsche Telekom. The final consideration will increase by up to E375m if performance targets are achieved.


The successful consortium has beaten competition from a combination of CVC Capital Partners and Warburg Pincus and, separately, Hicks, Muse, Tate & Furst.


The three private equity participants will each provide a third of the equity financing, totaling 30 per cent of the total. The remainder will be financed through a short-term bridge loan from Morgan Stanley and Goldman Sachs, which will later be securitised.


The maximum $2.1bn payable by the consortium is still less than half the E5.5bn offered by Liberty Media in 2001. The Liberty offer was subsequently rejected by the German competition authorities last year, by which time valuations in the sector had plummeted.  


Deutsche Telekom though is intent on selling in order to further reduce its debt pile down to E50-53bn in the current financial year – at one time the firm was laden with E63bn of debt. The carrier has concluded sales since December which have generated over E1.2bn in income. Included in this was the sale of a 10.9 per cent stake in European satellite agency Eutelsat to a consortium led by Investindustrial, the Italian private equity house formerly known as 21 Invest, for E210m.


Deutsche Telekom’s cable television unit has around 10 million customers in Germany and has annual cashflows of around E300m.