Under the terms of the deal, the Netherlands’ largest telephone company, Royal KPN NV, is to pay 47m pounds ($88m) in cash in order to boosts its position in the Dutch broadband market. Demon Netherlands will give KPN another 70,000 customers, on top of its 1.6 million plus domestic broadband customers.
Thus said it would use proceeds from the sale, which is subject to the advice of works councils at both Demon Netherlands and KPN, to reduce bank debt.
For the year ending March 31, Demon Netherlands posted earnings before interest, tax, depreciation, and amortization of 2.2m pounds ($4.1m) on revenue of 19.8m pounds ($37.2m).
Thus first announced the sale of Demon Netherlands in February as it sought to ramp up the scale of its UK operation after announcing the acquisition of two rival players. It purchased Your Communications Plc from United Utilities Plc for 58.8m pounds ($104.5m) in shares.
Your Communications was an alternative carrier for business customers and the public sector, predominantly in the northwest of England. It provided fixed-line voice and data services, and operated a mobile business that is Vodafone’s largest independent UK business-to-business service provider.
It also purchased UK-based Legend Communications Plc for approximately 11.5m pounds ($20.4m), in order to boost its Demon UK internet service. Legend was an ISP and hosting services provider for business customers, again predominantly in northern England.
However, the effect of these acquisitions has meant that Thus had to announce a placing of 67.43 million new shares, representing 5% of its share capital. It also proposed a one-for-10 share consolidation to reduce the volatility of its shares.
Thus also said its existing 55m pound ($97.9m) credit facility had been extended by 30m pounds ($53m), mainly to provide funding for integration following completion of the Your Communications acquisition.
Last year, Thus lost out on an audacious last-minute bid for Energis. Energis had already been in advanced negotiations with Cable & Wireless Plc, and in the end opted to go with C&W.
