Manama, Bahrain: Batelco Group (Ticker: BATELCO), the leading telecom in the Middle East with operations across six countries, today announced the acquisition of various companies from Cable & Wireless Communications (CWC), which comprise its Monaco and Islands Division.

The new Batelco's acquisition is related to acquiring the entire CWC interest in The Maldives, Channel Islands and Isle of Man, the Seychelles, South Atlantic and Diego Garcia as well as a 25% shareholding in Compagnie Monagesque de Communications SAM ("CMC"), which holds CWC's 55% interest in Monaco Telecom, for a consideration of $680M ("the Acquisition"). This represents a multiple of 5.6 x proportionate EBITDA for the twelve months ending 30 September 2012. The Acquisition is subject to Batelco and CWC shareholder approval, and respective consents and approvals in each of the markets as applicable.

In addition, Batelco and CWC have entered into put and call arrangements in relation to CWC's remaining 75% interest in CMC, allowing Batelco to acquire a controlling interest in Monaco Telecom for an additional consideration of $345M. These options can be exercised within twelve months of closing of the Acquisition, subject to satisfactory regulatory and other consents, including approval of the Principality of Monaco. In the event such consents are received within the above period, the total consideration for the entire Monaco & Islands division will be $1,025m, representing a multiple of 6.2 x proportionate EBITDA for the twelve months ending 30 September 2012. If the necessary consents are not obtained, the 25% shareholding in CMC acquired as part of the Acquisition will be sold back to CWC for $100m pursuant to a further option arrangement between CWC and Batelco.

Batelco Group Chairman, Shaikh Hamad bin Abdulla Al Khalifa said: "Batelco Group is pleased to announce this transformative transaction which will see the Group emerge as a communications player of global relevance and Bahrain's most diversified international company. With the acquisition of CWC's Monaco and Islands Division, we will extend our reach and take our expertise to up to eleven new markets across the globe."

"We have been pursuing a strategy of diversification and growth in order to create a more profitable and cash generative communications Group. This acquisition supports Batelco's strategy by adding four new cash generative businesses, which will from the outset serve to diversify and enhance our profitably and cash flows and complement our continued efforts to drive value and build further market leadership in our six existing businesses across the Middle East region."

Also commenting on the announcement, Shaikh Mohamed bin Isa Al Khalifa, Batelco Group CEO, said: "We are pleased to announce this acquisition, which will increase the scale and diversification of our operations. Batelco Group will have the opportunity to operate, in collaboration with its new business partners, across 17 markets. We look forward to working closely with all the shareholders and management teams in these companies to ensure we continue to deliver value and innovation to customers and be recognized as market leaders."

He added: "In addition to growing our footprint and supporting growth into new markets, this transaction will also enable us to enhance our position across our current businesses. Our operations and customers in our home market of Bahrain and elsewhere will benefit from the transfer of know-how and innovation exchange between all operations. With added scale, we will also achieve greater synergies in areas such as procurement, investments in network infrastructure, applications and content, global roaming arrangements, talent management and executive leadership development."

Batelco Group is currently in the process of finalizing plans to raise the necessary funds for the acquisition. The Group intends to raise up to $1.0 billion of debt through a bond issue and a term loan facility for the transaction. Batelco Group has appointed Citigroup and BNP Paribas as its bankers to raise funds.

Batelco's lead financial advisor for this acquisition is Houlihan Lokey. Citigroup also served as a financial advisor. Linklaters and Ernst & Young have been appointed as legal and accounting/tax advisers respectively, whilst Oliver Wyman was engaged to complete commercial and technical due diligence.

"As a result of this deal and the further diversification of our business we have the opportunity to deliver greater innovation and value to our customers across many markets whilst also enhancing our ability to maintain strong levels of profitability and to deliver on our commitments to shareholders, " concluded Shaikh Mohamed.

This press release has been issued by Batelco Corporate Affairs department.
For further information, please contact Batelco Public Relations Office
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