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07.09.2021 – 07:01

Deutsche Telekom AG

media information: Deutsche Telekom and Tele2 announce 5.1 billion euros sale of T-Mobile Netherlands

media information: Deutsche Telekom and Tele2 announce 5.1 billion euros sale of T-Mobile Netherlands
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Deutsche Telekom and Tele2 announce 5.1 billion euros sale of T-Mobile Netherlands to a Consortium of Apax and Warburg Pincus

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Deutsche Telekom AG (“Deutsche Telekom”) and Tele2 AB (“Tele2”) announced today that they have entered into an agreement to sell T-Mobile Netherlands Holding B.V. (“T-Mobile NL”) to WP/AP Telecom Holdings IV B.V. (the “Consortium”), an entity jointly controlled by funds advised by Apax Partners LLP (“Apax”) and Warburg Pincus LLC (“Warburg Pincus”) for an Enterprise Value of 5.1 billion euros, equating to approximately 8.7x LTM adjusted EBITDA AL.

The transaction marks the completion of Deutsche Telekom’s strategic review of T-Mobile NL which was announced at the May 2021 Capital Markets Day and follows the 0.7 billion euros divesture of its Dutch mobile tower business earlier this year.

As a consortium with long-standing experience and differentiated strategic value add in the telecommunications sector, Apax and Warburg Pincus will support T-Mobile NL and its management team in the next stage of their growth strategy.

Repositioning T-Mobile NL to one of the fastest growing European MNOs

The transaction follows the successful turnaround of T-Mobile NL by Deutsche Telekom and the transformation of the company into one of the fastest growing and leading European mobile network operators. Since 2017, T-Mobile NL has significantly strengthened its mobile market share from 25 percent to 42 percent in 2020 (based on number of mobile SIMs), becoming the leading mobile operator in the Netherlands. T-Mobile NL successfully entered the fixed market with the acquisition of Thuis in 2016 and further reinforced its market position by forming a strategic partnership with Open Dutch Fiber (owned by KKR and DTCP) in 2021.

Today, T-Mobile NL is a full FMC player and the fastest grower in the fixed market serving around 700,000 broadband customers as end of second quarter of 2021. T-Mobile NL’s success in mobile-, fixed- and FMC services was made possible by strategic self-funded investments into the network – its mobile network is today recognized as the #1 network in the world and the #1 network in the Netherlands for five years in a row (Source: Umlaut „Best in Test Global Mobile Benchmark 2020/2021” and “Best in Test umlaut connect Mobile Network Test in the Netherlands 2020/2021”).

T-Mobile NL’s operational improvements have translated into an outstanding growth profile, with a 15 percent adjusted EBITDA AL CAGR (like-for-like adjusted for tower carve-out) between 2018 and 2020. Beyond strong organic growth, T-Mobile NL has a track record of value accretive M&A by acquiring Thuis in 2016, combining with Tele2 Netherlands in 2018 and acquiring the Dutch MVNO Simpel in 2020.

“Through our dedicated value creation plan and T-Mobile NL’s unique challenger mind-set, we have successfully transformed T-Mobile NL into the fastest growing MNO in Europe. I am proud of what the entire Dutch Team lead by Soren Abildgaard has achieved through their relentless efforts and clear customer focus and I am thankful for the valuable support of Johan Andsjö as the leading member in the advisory board. In Apax and Warburg Pincus we are convinced we have found the perfect partners for T-Mobile NL to take the company to the next level of growth and continue the FMC Challenger Strategy,” said Thorsten Langheim, Board member for USA and Group Development Deutsche Telekom AG, and responsible for T-Mobile NL.

“We have come a long way to reposition T-Mobile NL as a winning player by driving innovation and change within the market, being the first mobile operator to offer Unlimited and nationwide 5G in the Netherlands. We believe that T-Mobile NL today is better positioned than ever and as a management team we are excited to partner with Apax and Warburg Pincus to execute the next phase of our growth story,” said Søren Abildgaard, Chief Executive Officer of T-Mobile NL.

Apax and Warburg Pincus Supporting T-Mobile NL’s Next Stage of Growth

Apax and Warburg Pincus are leading private equity firms with a strong track record in the communication services and broader TMT sector. As joint owners of Inmarsat, both have a track record of partnering within the telecommunications space. Other relevant precedent investments include: Orange Switzerland, Ziggo, TDC, Wind Telecom and Community Fibre. Leveraging its extensive experience, the Consortium is fully committed to supporting T-Mobile NL on its growth path.

The transaction is subject to customary closing conditions, including regulatory approvals and consultation with employee representatives.

Upon closing of the transaction, Deutsche Telekom will receive approximately 3.8 billion euros net cash proceeds from the transaction and deconsolidate T-Mobile NL, which generated 2,008 million euros of revenues and 582 million euros of adjusted EBITDA AL in the last twelve months as of June 30, 2021.

Cash proceeds to Deutsche Telekom are net of proceeds to 25 percent shareholder Tele2 and other debt items. They include the repayment of Deutsche Telekom’s shareholder loans to T-Mobile NL.

Morgan Stanley acted as exclusive financial advisor to Deutsche Telekom on this transaction. De Brauw Blackstone Westbroek acted as legal advisor to Deutsche Telekom.

This media information contains forward-looking statements that reflect the current views of Deutsche Telekom management with respect to future events. They are generally identified by the words “expect,” “anticipate,” “believe,” “intend,” “estimate,” “aim,” “goal,” “plan,” “will,” “seek,” “outlook,” or similar expressions and include generally any information that relates to expectations or targets for revenue, adjusted EBITDA, or other performance measures. Forward-looking statements are based on current plans, estimates, and projections, and should therefore be considered with caution. Such statements are subject to risks and uncertainties, most of which are difficult to predict and are generally beyond Deutsche Telekom’s control. They include, for instance, the progress of Deutsche Telekom’s staff-related restructuring measures and the impact of other significant strategic or business initiatives, including acquisitions, dispositions, and business combinations. In addition, movements in exchange rates and interest rates, regulatory rulings, stronger than expected competition, technological change, litigation and regulatory developments, among other factors, may have a material adverse effect on costs and revenue development. If these or other risks and uncertainties materialize, or if the assumptions underlying any of these statements prove incorrect, Deutsche Telekom’s actual results may be materially different from those expressed or implied by such statements. Deutsche Telekom can offer no assurance that its expectations or targets will be achieved. Without prejudice to existing obligations under capital market law, Deutsche Telekom does not assume any obligation to update forward-looking statements to account for new information or future events or anything else. In addition to figures prepared in accordance with IFRS, Deutsche Telekom presents alternative performance measures, e.g., EBITDA, EBITDA AL, adjusted EBITDA, adjusted EBITDA AL, adjusted EBITDA margin, adjusted EBIT, EBIT margin, adjusted net profit/loss, adjusted earnings per share, free cash flow, free cash flow AL, gross debt, and net debt. These measures should be considered in addition to, but not as a substitute for, the information prepared in accordance with IFRS. Alternative performance measures are not subject to IFRS or any other generally accepted accounting principles. Other companies may define these terms in different ways.

Deutsche Telekom AG

Corporate Communications

Tel.: +49 (0) 228 181 – 49494

Email: media@telekom.de

Further information for the media at: www.telekom.com/en/media

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