This Day On The Street
Continue to site
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

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.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $93.24 -0.41%
FB $117.81 -0.21%
GOOG $701.43 0.82%
TSLA $211.53 -4.96%
YHOO $36.94 2.61%


Chart of I:DJI
DOW 17,660.71 +9.45 0.05%
S&P 500 2,050.63 -0.49 -0.02%
NASDAQ 4,717.0940 -8.5450 -0.18%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs