French operator Iliad has teamed up with its founders private investment vehicle, NJJ, to buy a majority stake in Ireland’s largest telco, Eir.
As part of the new deal, Iliad will pay roughly €320 million to acquire 31.6% of Eir, while NJJ will take 32.9%, while existing shareholders Anchorage Capital Group and Davidson Kepner will retain a combined 35.5% of the Irish telco. While this is a minority stake for the moment, there are options for Iliad to take operational control of the telco in 2024.
The call option is exercisable in 2024 and would enable Iliad to acquire 80% of NJJ’s stake in Eir, at a 12.5% discount of fair market value. This discount would be determined by an independent valuation expert.
Such an acquisition will serve to feed Iliad’s geographical diversification ambitions, offering a strong entry into the Irish market. Aside from the domestic French market, Iliad has made moves into Switzerland and Italy also.
Eir is currently the market leader on the fixed line side, commanding a 32% market share, while it is in an attractive challenger position for mobile, holding 18% of the market. Revenues across Eir for the financial year ending June 2017 stood at €1.3 billion.
The news follows several months of debt restructuring for the Irish telco, and upon completion of the deal, its current CEO Richard Moat has said he will step down. The new management team will be determined by Iliad and NJJ.