Exit joy for Orange Romania investors

The consortium that invested in mobile telecoms company Orange Romania in 1999 has made a 4x money multiple on the sale of its stake to France Télécom.

The private equity consortium that backed mobile phone company Orange Romania, an arm of France Télécom, six years ago has sold its 20 percent stake to the parent company in a deal worth $523 million. The consortium has made a 4x money multiple on its investment.

With a market share of 48 percent Orange Romania is the country’s largest mobile phone operator. It was founded in 1997 as a joint venture between France Télécom and a consortium of Romanian investors.

The international private equity consortium bought out the local investors in 1999, and increased their stake two years later. The consortium is led by the AIG New Europe Fund, a $320 million fund managed by an affiliate of AIG Capital Partners. Warsaw-based Enterprise Investors holds the second largest stake.

The consortium also includes Innova Capital, another Polish firm; Communications Venture Partners; Société Générale Romania Fund, a fund managed by France’s Societe Generale Asset Management; French communications company Alcatel; and BancBoston Capital, an arm of the Bank of America.

Following the transaction, France Télécom has increased its stake from 73 percent to 97 percent.

Enterprise Investors said in a statement that the company’s revenues had quadrupled since the original investment, and that its EBITDA margin of 54 percent was the highest in the Orange Group, France Télécom’s mobile subsidiary.

A similar consortium, also led by AIG, still holds a larger stake in Slovakia’s Orange Slovensko that it acquired in 2001, according to Enterprise managing partner Jacek Siwicki.