MasMovil Ibercom Buys Xtra Telecom

MasMovil Ibercom Buys Xtra Telecom

MasMovil Ibercom Buys Xtra Telecom

Spanish telecommunications provider MasMovil Ibercom is back on the M&A trail in its quest to become one of the country’s top five operators.

Last Wednesday, it finalised  the purchase of The Phone House Holdings’ Spanish unit Xtra Telecom. MasMovil Ibercom reached a preliminary agreement with The Phone House, Europe’s largest independent communications retailer, in July. The deal will include Happy Movil, the Spanish mobile virtual network operator (MVNO) of The Phone House.

Full financial details of the transaction have not been revealed, but MasMovil Ibercom said it would be paying less than 6 times Xtra Telecom’s EBITDA to fully acquire the share capital. The acquisition is expected to generate annual operational, industrial and commercial synergies to the tune of over 2 million euros from 2015. And it will allow MasMovil Ibercom to grow its MVNO and wholesale distribution activities, the cornerstone of its growth strategy. So it’s a savvy investment!

COMPETING IN A TOUGH MARKET

MasMovil merged with business-focused telco Ibercom earlier this year in a move aimed at enabling the partners to compete in a tough domestic business environment. Their strategy? To integrate fixed and mobile voice and data services.

And since the tie-up, the new company has not let the grass grow under its feet, successfully swooping on two targets in quick succession:
Quantum, a telecoms wholesaler specialising in international traffic
Digital Valley, a firm specialising in data centre services.

With Xtra Telecom now under its belt, MasMovil Ibercom is on the way to meeting more of its ambitious business targets.

INVESTING IN SPAIN’S RECOVERY

MasMovil Ibercom is now the alternative operator with the greatest volume in the market. And while still a small fish in a big pond in comparison with industry giants like Telefonica and Vodafone, MasMovil Ibercom’s expansion is likely to be a catalyst for further consolidation in the Spanish market.

Like many of its European peers, Spain’s telecoms sector is now slowly starting to rebuild as the economy begins to recover and domestic demand slowly starts to pick up. But consumers are also becoming more demanding and the industry’s focus is shifting towards quad-play. This involves providing bundles of phone, broadband, mobile and paid-TV services.

MasMovil Ibercom’s investment drive to offer an integrated product may just be a drop in the ocean, but the company is certainly going in the right direction! And it aims to continue to combine organic growth with selected acquisitions, cashing in on the 25 million euros it recently raised from a capital hike.

For information on investing in Spain, contact corporate law firm Argali Abogados.

Leave a Reply