Telco Insights: Zegona Completes €5 Billion Acquisition of Vodafone Spain

Zegona Communications, a UK-based telecommunications investment firm, has completed the acquisition of Vodafone Spain for €5 billion ($5.3 billion) this month, having first announced its intention to acquire Vodafone Spain in May 2023. This is Zegona’s second entry into the Spanish telecoms market after its 2015 acquisition of Telecable, a regional cable operator. Zegona later sold Telecable to Euskatltel in 2017.

To fund the acquisition, Zegona will raise equity by selling newly created ‘ordinary’ shares, which is anticipated to raise between €300 million ($322 million) and €600 million ($644 million). Conversely, Zegona can use Vodafone Spain for up to a decade; however, other services and long-term agreements will require future negotiation. Vodafone values the deal at a multiple of 5.6x adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) and 13.0x operating free cashflow for the year ending September 30, 2023. Vodafone will continue to provide operational technological support.