This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

United Internet to Buy Out KKR From Versatel

BERLIN ( The Deal) -- German Internet services provider United Internet on Tuesday agreed to buy the controlling stake it doesn't already own in Berlin broadband provider Versatel from private equity house Kohlberg Kravis Roberts & Co. for 947 million euros ($1.25 billion) including debt.

United Internet, of Montabaur, Germany, said it would pay 586 million euros in cash and absorb 361 million euros of Versatel debt in exchange for KKR's 74.9% Versatel stake.

KKR bought the-then publicly traded Versatel after striking a 2011 agreement with major shareholders Apax

Partners LLP and Cyrte Investments BV as well as United Internet that valued the target at 295 million euros. United Internet, which is led by CEO Ralph Dommermuth, retained an option to buy back into Versatel and bought its one-quarter holding in 2012.

Versatel is Germany's No. 2 fiber network operator behind Deutsche Telekom AG. It has a countrywide network of 37,000 kilometers, providing broadband to about 440,000 customers. United, which offers e-mail and corporate Internet services, wants to merge its services with Versatel's network to save a forecast 55 million each year.

United Internet said it would also spend an additional 165 million euros through 2019 to expand Versatel's network. The target expects sales this year of 548 million euros, about level with 2013, resulting in Ebitda of 164 milllion euros, up from 155 million euros in 2013.

"The complete acquisition of Versatel by United is prudent from both a strategic and a financial angle. The price is fair even without considering potential synergies and the corporate business could develop into a growth engine," wrote DZ Bank AG analyst Karsten Oblinger in a note. He has a buy rating on United's shares.

It's the second deal in recent weeks for United Internet. Last month it agreed to buy 10.7% of Berlin Web incubator Rocket Internet GmbH. United would pay 333 million euros in cash and an additional 105 million euros by folding in its minority stake in Munich venture capitalist Global Founders Capital for the stake.

Several Rocket partners have exchanged stakes in joint companies for shares in Rocket as the company prepares for an expected initial public offer next month. United's stake was cut to 10.4% when publisher Verlagsgruppe Georg von Holtzbrinck GmbH swapped stakes in Rocket startups for a minority holding in the parent.

The Versatel acquisition is expected to close in October.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,156.85 +24.88 0.15%
S&P 500 2,001.57 +2.59 0.13%
NASDAQ 4,562.1890 +9.43 0.21%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs