The Apax offer, unveiled Saturday, Dec. 24, values Switzerland's No.3 mobile phone operator at about 6.5 times its estimated 2011 Ebitda, according to France Telecom. The London-based buyout shop outbid four other private equity contenders for the unit, all of which submitted offers before a bid deadline of December 12, according to a source with knowledge of the process.
"We have been following this asset closely over the past two years and are delighted to have secured this attractive investment opportunity," said Apax partner Gabriele Cipparrone.
The acquisition of Orange Switzerland caps a busy year for Apax, which has concluded more than €10.2 billion of deals, including the $6.3 billion acquisition of Kinetic Concepts Inc., a maker of medical devices. That business was snapped up in July by an Apax-led consortium.
The bid for Orange Switzerland will be submitted to France Télécom's board in the second week of 2012 and is subject to approval by Swiss regulatory authorities.
"This transaction, once completed, will mark a major step in the optimization strategy of France Télécom-Orange asset portfolio, announced in May 2011," the company said in a statement.
The sale is the first significant divestment by France Télécom's CEO Richard since he unveiled plans to reduce exposure to small and mature European markets, including Switzerland, Austria and Portugal, and focus on faster-growing African markets. France Télécom wants to double its sales in Africa and the Middle East to about €7 billion by 2015.
The decision to sell the Swiss business came after France Télécom tried and failed in 2010 to merge Orange Switzerland with Sunrise Communications AG, a Swiss mobile phone company owned by CVC Capital Partners. CVC bought Sunrise in Oct. 2010 from TDC A/S, a Danish telecommunications group controlled by a consortium of PE shops including Apax, Blackstone Group LP, Kohlberg Kravis Roberts & Co., Permira and Providence Equity Partners LLC.
Orange Switzerland has 1.6 million customers and reported revenues of CHF1.3 billion in 2010.
France Télécom was advised on its auction by Perella Weinberg Partners LP and Lazard Ltd. Apax took financial advice from Nomura Group and Rothschild and tapped Bär & Karrer AG for legal counsel.