Currency in HUF
Last close As at 17/03/2023
HUF684.00
▲ −5.00 (−0.73%)
Market capitalisation
HUF207,857m
Research: TMT
4iG has finalised the agreement to buy a majority stake in Vodafone Hungary, with deal completion expected by the end of the month. This will make the company the largest fixed broadband and internet TV provider and second-largest mobile operator in Hungary. Including this deal, 4iG will have made acquisitions worth c €3bn over the last 18 months as it has built out its position as a converged telecom operator in Hungary and the West Balkans and the leading IT services provider in Hungary.
4iG |
Vodafone Hungary acquisition finalised |
Update on acquisition |
Telecoms |
9 January 2023 |
Share price performance Business description
Analyst
4iG is a research client of Edison Investment Research Limited |
4iG has finalised the agreement to buy a majority stake in Vodafone Hungary, with deal completion expected by the end of the month. This will make the company the largest fixed broadband and internet TV provider and second-largest mobile operator in Hungary. Including this deal, 4iG will have made acquisitions worth c €3bn over the last 18 months as it has built out its position as a converged telecom operator in Hungary and the West Balkans and the leading IT services provider in Hungary.
Year end |
Revenue |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/19 |
41.1 |
3.3 |
30.8 |
22.0 |
23.3 |
3.1 |
12/20 |
57.3 |
4.2 |
37.7 |
22.5 |
19.1 |
3.1 |
12/21 |
93.7 |
8.7 |
74.6 |
29.0 |
9.6 |
4.0 |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
4iG has today confirmed that via its subsidiary, Antenna Hungária, together with the Hungarian state (represented by Corvinus Nemzetközi Befektetési Zrt), it has entered the final sale and purchase agreement with Vodafone Europe BV to acquire a 100% stake in Vodafone Hungary, with the deal expected to close at the end of January. As originally announced in August 2022, 4iG will indirectly become the majority owner with a 51% stake and Corvinus will acquire 49%. The enterprise value for the deal has been agreed at HUF660bn, below the HUF715bn at the time of the original announcement. This equates to an EV/EBITDA multiple of 7.1x based on Vodafone Hungary’s EBITDA for year-end 31 March 2022. The company expects that cost and revenue synergies should reduce this multiple further. The rating agency, Scope, has upgraded its issuer rating of 4iG from ‘B+ under review for possible upgrade’ to ‘BB-/stable’, based on an improved competitive positioning with significant mobile market share in Hungary following the Vodafone deal and slightly improved credit metrics. The agency estimates that Scope-adjusted debt/EBITDA will be c 4.5x in FY24, down from more than 5x now.
The company continues to make progress with its West Balkans telecom operations, completing the merger of the two Albanian telecom businesses (ONE Telecommunications and ALBtelekom) and acquiring 5G spectrum in Montenegro (15-year licences for spectrum within the 700MHz and 3,600MHz bands). We intend to reinstate forecasts once the deal financing structure has been disclosed and the deal has completed.
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Research: TMT
Nanoco’s regulatory news release gives more information on its proposed settlement with Samsung and adds useful context in the face of speculation on investor forums and share price volatility after the 6 January no-settlement announcement. Nanoco expects to issue another update when it completes the final binding agreement within the next 30 days. We leave our estimates unchanged.
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