Sky TV and Vodafone NZ to merge

Sky TV to acquire Vodafone NZ for an enterprise value of $3,437m (cash and debt free)

New Zealand’s subscription TV provider Sky TV and telecommunication company Vodafone NZ have announced the integration of the two companies this morning.

Details of the merger were presented by Sky chairman Peter Macourt and CEO John Fellet. Here are some of highlights:

•  Implemented as a Sky acquisition of Vodafone NZ for a combination of shares and cash
Consideration

ALSO: NZ Sky TV chief John Fellet hedges bets on new platforms

•  Sky to acquire Vodafone NZ for an enterprise value (“EV”) of $3,437m (cash and debt free)
–  Issue of new Sky shares giving Vodafone a 51% interest in the combined group
–  Cash payment of $1,250m
–  Implies a Vodafone NZ EV / FY2017E EBITDA ratio of 7.1x and EV / FY2017E EBITDA less capex of 12.5x (prior to synergies)

•  New Sky shares issued at $5.40 per share, representing a 21% premium to last close of $4.47 and a 27% premium to 1 month VWAP of $4.25 as at 7 June 2016
–  Implies a Sky EV / FY2017E EBITDA ratio of 8.0x and EV / FY2017E EBITDA less capex of 12.3x
Board support

•  The Sky board and management have conducted a review of Sky’s strategic options to deliver long term value creation for shareholders.

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