July 24 (SeeNews) - Digi Communications [BSE: DIGI], majority owner of Romanian company RCS&RDS, said on Monday it will pay 140 million euro ($163 million) for Hungarian telecommunications operator Invitel Tavkozlesi, part of Invitel Group.
The transaction is to be carried out through Digi's Hungarian subsidiary, Digi Tavkozlesi es Szolgaltato Kft. (Digi HU), Digi Communications said in a statement filed with the Bucharest Stock Exchange, BVB.
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The total consideration to be paid by Digi HU for the acquisition of Invitel is subject to further price adjustments, as customary for transactions of this size in the telecommunications industry, it added.
The transaction needs to be approved by the Hungarian Competition Authority.
"The transaction will consolidate Digi HU’s and, respectively, the company’s group position on the Hungarian telecommunications market, allowing it to expand its customer reach and experience, and creating better operational synergies," Digi said.
Invitel Group’s B2B and wholesale unit Invitech Solutions is not part of the transaction.
Digi HU will conclude reciprocal services agreements with Invitech Solutions for a total period of at least 10 years following completion of the transaction. The minimum aggregate value of services will be 91.6 million euro in Digi HU’s case and 16.4 million euro in Invitech Solutions’ case, according to the statement.
Founded in 1994, Invitel Tavkozlesi is one of the key operators on the Hungarian telecommunications market. It offers an extensive portfolio of services to residential and small business customers, including interactive, digital and HD television, fast Internet offerings and fixed telephony services across its regional networks.
In 2016, Invitel posted a revenue of 85 million euro and a 23.3 million euro EBITDA. At the end of May, it had 691,664 revenue generating units in cable TV, broadband Internet and fixed telephony.
RCS&RDS, founded by Romanian businessman Zoltan Teszari, comprises two companies - Romanian Cable Systems (RCS) founded in 1994, and Romanian Data Systems (RDS) founded in 1998.
Its parent company, Cable Communication Systems, now Digi Communications N.V., indirectly operates telecommunications groups in Hungary, Spain and Italy through RCS&RDS.
Shares of Digi Communications started trading on BVB in May, following the successful closing of the largest IPO of a private company concluded on the Romanian capital market. The value of the offering topped 944 million lei ($230.3 million/205.8 million euro).
Starting July 3, Digi is part of BVB's blue-chip BET and BET-TR indices.
At the end of April, Standard & Poor's Ratings Services upgraded RCS & RDS and Digi Communications long-term corporate ratings to 'BB-' from 'B+', with stable outlooks.
Digi's shares were traded flat at 41 lei at 1411 CET on the BVB.
(1 euro=4.5656 lei)