PARIS-France Telecom signed an agreement with a group of minority shareholders in Orange Romania to acquire their shares for $523 million in cash, corresponding to a 2004 earnings before interest, taxes, depreciation and amortization multiple of 4.8. Following the transaction, France Telecom’s indirect stake in Orange Romania will increase from 73.27 percent to 96.63 percent.
Sellers included a consortium of financial investors led by AIG New Europe Fund, a $320 million fund managed by an affiliate of AIG Capital Partners. Other members of the consortium include Polish Enterprise Fund L.P. and Polish Enterprise Fund IV L.P. managed by Enterprise Investors; Innova/98 L.P. managed by Innova Capital; Communications Venture Partners; BancBoston capital, now part of Bank of America and Societe Generale Romania Fund; and Alcatel NV.
The French carrier said the transaction enables it and wireless subsidiary Orange plc to consolidate their positions in one of their key assets with high-growth prospects. France Telecom said Orange Romania has a 48-percent of market share, revenue growth of 47 percent between 2003 and 2004, and an EBITDA margin of 54 percent. Four mobile carriers operate in Romania.
