Kabel Deutschland Places $506 Million Financing for Tele Columbus Acquisition
COLOGNE, Germany - Kabel Deutschland (KDG) Germany’s largest cable operator, has successful placed $506 million (€400 million) in financing for its planned acquisition of smaller competitor Tele Columbus. KDG placed €400 million in senior notes at a 6.5 percent coupon, due in 2017. The cash – $125 million more than KDG had initially expected to raise – will go towards the $760 million (€600 million) acquisition of struggling German cable group Tele Columbus.
The acquisition, which still has to pass muster with German authorities, would add Tele Columbus’ 1.7 million cable customers to KDG’s network, expanding KDG’s reach to more than 10 million households across Germany.
While operators in the U.S. have been hit by “cable cutters”: customers opting to cancel their cable services and switch to online operators, Germany remains a strong growth market. KDG posted a net profit of $201 million (€159 million) last year with revenues up 6.3 percent at $2.1 billion (€1.7 billion). KDG and other German cable operators have been particularly successful at getting customers to upgrade to so-called triple play offerings, where they receive telephone, Internet and TV services from the one cable company.