Greenfield makes 100x money on Dutch telco

The Dutch private equity firm has made the historic triple digit return by agreeing to sell mobile telephone network Telfort to KPN for up to €1.12bn, two years after acquiring it for just €12m.

Greenfield Capital Partners, the Dutch telecommunications private equity specialist, has sold mobile network Telfort to KPN, the Dutch fixed line and mobile telecoms operator for up to €1.12 billion ($1.36 billion).

The Greenfield offer enabled us to sell at a realistic valuation given market conditions in the Netherlands.

Peter Erskine, chief executive, mmO2 speaking in 2003

KPN has made an upfront payment of €980 million, with a further €140 million dependent upon performance, for the company that Greenfield acquired for just €12 million in April 2003.

Greenfield paid €25 million for Telfort, including €13 million of cash on the company’s books. The firm acquired Telfort from mmO2, the mobile arm of UK telecoms giant BT, which had paid a hefty €2 billion for the company in 2000.

At the time, chief executive of mmO2 Peter Erskine said: “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 represents a good opportunity for the Dutch business, its employees, customers and suppliers.”

The sale to KPN has resulted in a return of between 80 and 100 times Greenfield’s original investment according to the firm, one of the largest in the history of European private equity.

In October 2004, the firm sold a controlling stake in Telfort to Dutch investor Marcel Boekhoorn in a deal which valued the company at approximately €350 million. Boekhoorn already owned an interest in Telfort through his investment in Greenfield’s technology vehicle, the NEThave fund.

Telfort recorded a net profit of €46.2 million on sales of €509 million. At March 31st, the company had 2.4 million customers.