UPC owner Liberty Global has signed a share purchase agreement with Unity Media to acquire all of the issued and outstanding capital stock of Germany's second largest cable network operator Unitymedia. Liberty Global will acquire 100 percent of the shares of Unitymedia for an equity purchase price of EUR 2 billion from its parent, which is owned by a group of shareholders led by BC Partners and Apollo. Together with Unitymedia's reported net debt at 30 September of approximately EUR 1.5 billion the total consideration is approximately EUR 3.5 billion, excluding transaction costs, and represents a purchase price multiple of approximately 7.4 times the estimate of Unitymedia's 2010 Adjusted EBITDA under IFRS accounting standards. Completion of the transaction is expected to occur in the first half of 2010 and is subject to regulatory approval. Unitymedia has a cable network covering 8.8 million homes with 6.4 million RGUs. In terms of financing the transaction, Liberty Global are targeting debt financing on Unitymedia's business of approximately EUR 2.5 billion, of which the net proceeds, after refinancing Unitymedia's existing debt and transaction costs, will be available to fund a portion of the equity consideration. The company anticipates that it will fund the remaining equity purchase price with a combination of existing liquidity available to LGI, the net proceeds from the sale of USD 750 million in convertible notes, excluding an overallotment option, and the sale to SPO Partners & Co., a long-standing large shareholder, of 4.5 million shares of Series A common stock and 1.5 million shares of Series C common stock at a price of USD 21.375 per share for gross proceeds of approximately USD 128 million. Liberty Global is being advised by Goldman Sachs in connection with this acquisition.
