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Warburg Pincus, Cinven buy Casema in €2.85bn deal

Private equity firms Warburg Pincus and Cinven have won an auction to acquire Dutch cable television operator Casema from three other private equity firms for €2.1bn.

Warburg Pincus and Cinven have bought Dutch cable company Casema for €2.1 billion ($2.6 billion) from its current private equity firm owners The Carlyle Group, Providence Equity Partners, and GMT Communication Partners.

As part of the deal Warburg Pincus stake in Dutch cable operator Multikabel will be folded into the new holding company. The total enterprise value of the transaction is €2.85bn, according to a statement by the two firms.

It is the first deal Cinven and Warburg Pincus have done together, according to David Barker, a Cinven partner. He said: “It became clear as the deal unfolded that working together was a sensible route forwards. The two businesses offer greater scale and attractive top line growth.”

It became clear as the deal unfolded that working together was a sensible route forwards. The two businesses offer greater scale and attractive top line growth.

David Barker, partner, Cinven

He did not rule out further acquisitions to boost the combined business’ position in the market.

Warburg bought Multikabel, the fourth-largest Dutch cable company, for €515 million, last December. In the Casema transaction it is valued at €750m. Joe Schull, a partner at Warburg Pincus, said Multikabel’s value had enjoyed a significant uplift for three reasons. He said: “The business was bought on an attractive basis. It has performed well and cable multiples have risen in the past year.”

Casema is the third-largest in the market, and the two companies may be combined, after the deal goes through, to challenge the number-one player, UPC Nederland.

Cinven, meanwhile, recently reached a deal to acquire French cable company UPC France for €1.25 billion.

Carlyle and Providence each own 46 percent of Casema, while GMT owns eight percent. They bought Casema for €665 million in 2003, and since then the company has invested in about €250 million in improvements.

Schull: significant lift in valuation

According to a source close to Carlyle, Casema doubled EBITDA and increased the number of employees by 40%.

Morgan Stanley, ABN AMRO, Credit Suisse and Rothschild were financial advisors to Cinven and Warburg Pincus. Goldman Sachs acted as financial advisor to the selling consortium.

Reuters reported that Dutch telecom company KPN has announced that it will oppose the Casema deal with legal action on antitrust grounds. KPN sued the Dutch government last month, charging that the country’s telecom regulations made KPN unable to compete effectively with telephone services offered by less-regulated cable companies.