Zegona completes acquisition of Vodafone Spain

Zegona Completes €5bn Acquisition Of Vodafone Spain

Zegona Communications plc (“Zegona” or the “Company”) is pleased to announce the completion of the acquisition of 100% of Vodafone Holdings Europe, S.L.U (“Vodafone Spain”) for €5.0 billion.

Advantaged Transaction Terms

• €5.0 billion valuation < 4x FY23 EBITDAaL[1]
• Euskaltel sold for 10.2x, MasMovil valued at 8.7x, Orange at 7.2x EBITDAaL[2]
• €900 million Vodafone financing; €3.9 billion debt facility; 3.0x leverage[3]
• Vodafone Group continues to provide brand and technical services

Vodafone Spain is strategically attractive

• Vodafone is the No. 3 player in Spain with significant market shares in mobile, broadband and TV
• Scale business with significant cash flow potential: €3.9 billion revenue, €1.3 billion EBITDAaL, €0.4 billion Cash Flow[4]
• Leading integrated operator with strong market positions in both consumer and B2B segments
• Gigabit capable fixed network passing 10.7 million homes with access to 95% of Spanish households
• High quality, market leading, mobile network with 4G/5G spectrum

Opportunity to deliver significant value for Zegona Shareholders

• Transform the business to deliver exceptional service to customers and attractive returns for investors
• Inject highly experienced senior management team; José Miguel García appointed as CEO
• Stabilise revenues with new commercial initiatives

Eamonn O’Hare, Zegona’s Chairman and CEO, said: “We have now completed the acquisition of Vodafone Spain and look forward to transforming the business and returning it to growth. I am pleased to welcome José Miguel García to lead Vodafone Spain as CEO, reuniting a team that has a proven track record of highly successful operational transformations in Spanish telecoms.

“The new 10-year network access agreement signed with Finetwork earlier this week demonstrates our ability to move swiftly on our well-defined strategy. With our proven track record, we are confident we will improve the performance of Vodafone Spain whilst delivering significant value for shareholders.”

1. “EBITDAaL” when referring to Zegona or Vodafone Spain is defined as Vodafone Group Spain segment’s reported Adjusted EBITDAaL adjusted in line with Zegona’s accounting policy relating to subscriber acquisition costs
2. Based on the relevant company’s reported transaction multiples
3. Based on FY23 EBITDAaL
4. Based on FY23. “Cash Flow” is defined as EBITDAaL less capex (accrual) excluding licence and Spectrum fees