Telenet has acquired a telecom company outside Belgium for the first time by agreeing to buy all the remaining shares in Luxembourg's Eltrona. With this deal, Telenet will become the sole owner of a telecom business outside of Belgium.
The founding shareholders of Eltrona and Telenet, an indirect wholly-owned subsidiary of Telenet Group, announce that they have agreed that Telenet will purchase all of the remaining shares of Eltrona, active in the Grand Duchy of Luxembourg. Members of the Denzle family will acquire Eltrona Security Systems.
Following Telenet's acquisition of Coditel Luxembourg (SFR-Coditel) in 2017, SFR Coditel's operations merged with Eltrona's operations in April 2020. As a result of this deal, Telenet received 50% -1 of the shares, and the founder shareholders of Eltrona received 50% +1 of the merged entity.
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Growth of the Merged Entity
In the past two years, the combined entity has continued to grow its operations under the Eltrona brand, providing a broad and distinctive range of telecommunications services covering the entire country of Luxembourg while combining the resources and subject matter expertise of Telenet and Eltron.
Consolidation
Eltron's founding shareholders wish to divest their share ownership in Eltrona. Therefore, to become Eltrona's sole shareholder, Telenet must now purchase the 50% + 1 share owned by the founding stockholders. The parties are working on completing the transaction by early January, which is anticipated to be completed in the following weeks. As a result, Eltrona's operations will be consolidated in Telenet's operational and financial statistics as of the beginning of January 2023.
Revenues Generated by Eltrona
With significant investments in a new IPTV and video platform, Eltrona realized an Adjusted EBITDA of euros 5.8 million for the fiscal year 2021, a revenue of euros 30.6 million, and a negative Adjusted EBITDA minus property and equipment additions of euros 2.2 million.
Eltrona Customer Base
Eltrona had around 50,000 distinct client relationships by the end of September 2022, serving about 46,000 cable and/or IPTV subscribers, about 16,000 broadband internet RGUs, about 8,000 fixed-line telephony users, and about 2,000 mobile SIMs. The company currently employs 145 people.
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"This acquisition unlocks new opportunities for both Telenet and Eltrona. It offers Telenet the opportunity to evolve as a telecommunications operator in a broader market. At the same time, Eltrona will benefit from Telenet's success and reputation in Belgium. By becoming the sole owner of Eltrona, I believe Telenet will be even better able to deliver the growth perspectives it deserves for the future in the competitive and evolving Luxembourg market and to make it the number one brand in terms of customer experience," said John Porter, CEO of Telenet.
Paul Denzel, a current CEO of Eltrona, said "I am happy to hand over the keys to Telenet, more than 30 years after Eltrona was founded by my father and the other founding families. This will enable Eltrona to write a new chapter and I'm convinced that it will prove to be a success for the company, its customers, its suppliers, and its employees. Of course, I'll be sad to hand over the reins to my successor but at the same time, we can all be proud of what we have achieved together. I would like to thank the shareholders and employees of Eltrona as well as all our customers and partners for the time spent together and I'm happy to leave them in the capable hands of Telenet."
For the time being, neither staff nor clients of Eltrona will face any changes. In the upcoming months, Telenet will appoint a new CEO. In the meantime, Karl Abelshausen, currently VP of Finance M&A, Integration & Tax at Telenet, will be appointed as the temporary CEO as soon as the deal is completed. The next few months will be spent defining the company's new strategy and ambitions.
