Cable & Wireless to acquire Energis

Cable & Wireless plc announced on August 16, that it has reached agreement to acquire the entire issued share capital of Chelys Limited (“Energis”).

Energis will be acquired on a debt and cash free basis, save for Energis’ finance lease obligations of approximately £37 million, for an initial cash consideration of £594 million. On completion Cable & Wireless will inject approximately £35 million in cash, which is expected to be recovered within the first year after completion, to meet Energis’ short-term working capital requirements. Completion of the acquisition is subject to Office of Fair Trading (“OFT”) approval. {{more}}

The acquisition is expected to fuse underlying earnings per share in the first full financial year after completion and beyond. In addition, the transaction is expected to deliver an acceptable return on invested capital in the second full financial year after completion.

Announcing the agreement Cable & Wireless Group CEO, Francesco Caio, said: “The acquisition of Energis is a further step in the development of Cable & Wireless in the United Kingdom (UK) and will accelerate the strategic transformation that we have undertaken in the last 15 months.

The integration of the two businesses will deliver good cost and capex synergies and add blue chip customers to our existing base in the large corporate segment. Importantly, it will also create a stronger player with the scale needed to succeed in the increasingly competitive telecoms industry. The timing of this acquisition allows us to exploit the rapid growth in demand for IP-based services and the opportunities presented by the creation of a regulatory framework designed to facilitate infrastructure-based competition. For these reasons, this acquisition makes both financial and strategic sense.”

Energis is the number three fixed line telecommunications operator in the UK and the only one focused exclusively on the largest organisations in the UK and Ireland. Specialising in building individual solutions for customers, its product portfolio spans voice, data, internet, contact centre services and security and is underpinned by a commitment to deliver superior levels of service. Major customers include the BBC, Caudwell communications, RAC, Royal and Sun Alliance, the UK Government, Virgin and Wanadoo.