Greenfield grabs mmO2 Dutch unit

Greenfield Capital Partners has agreed to buy the British mobile operator’s Netherlands-based business, paying just E25m for the E300m annual turnover business.

Greenfield Capital Partners, the Dutch telecommunications private equity specialist, has won the race to acquire O2 Netherlands, the Dutch unit of British mobile telecommunications business mmO2.

Greenfield has agreed to pay E25m in cash for the business, which reported turnover in the twelve months to 31 March 2002 of E292m. It reported an EBITDA loss of £51m and an operating loss before goodwill and exceptional items of £119m.  O2 Netherlands currently has some 750 employees and had approximately 1.25m customers as at 31 December 2002. mmO2 said the sale would result in a provision for loss on disposal of £1.4bn. mmO2 also said sale proceeds  would  be used to fund the ongoing operations of the core businesses  in the group.


Early reports suggested that mmO2 had put a E200m valuation on the unit, although Peter Erskine, chief executive of mmO2, said the agreed bid price was realistic in the current environment. “The Greenfield offer enabled us to sell at a realistic valuation given market conditions in the Netherlands. It is in the best interests of mmO2 shareholders and also represents a good opportunity for the Dutch business, its employees, customers and suppliers going forward.” 


O2, formerly the mobile telecoms unit of British Telecom, set up its Dutch business in September 1996 as a joint venture between BT and Nederlandse Spoorwegen, the Dutch railway company, with BT holding a 50 per cent stake. Initially, the business provided fixed line services only but was awarded a mobile licence in the Netherlands in February 1998 and in October that year it launched its GSM mobile network operations. 


In July 2000, BT completed the acquisition of the remaining 50 per cent in the Telfort Group for £1.2bn. The same month, the Telfort Group was awarded one of the five 3G (UMTS) licences for the Netherlands at a cost of £266m. 


At the time of its interim results last November, mmO2 said a number of options for O2 Netherlands were being considered. Greenfield has beaten off competition from a number of trade buyers, thought to include Versatel and Scarlet.


Greenfield has been one of the most active buyers in the Netherlands’ telecoms and communications market in the last twelve months. Last August, the firm acquired Energis NV, the Dutch telecoms services provider for an undisclosed price. “The business is complementary to our existing telecoms portfolio which includes Enertel NV, the number two dial-up telecoms operator in the Dutch market,” said Greenfield partner Stef van Doesburg. “This acquisition supports our overall strategy of investing in companies that offer a competitive range of fixed and mobile services.