TalkTalk Telecom acquires Tiscali UK Holdings from Tiscali

Wed. July 08, 2009; Posted: 01:34 AM

Jul 08, 2009 (Datamonitor Financial Deals Tracker via COMTEX) -- WHGPF | Quote | Chart | News | PowerRating -- TalkTalk Telecom Limited has acquired Tiscali UK Holdings Limited, a UK-based unit of Tiscali S.p.A., an Italy-based internet service provider.

TalkTalk is a UK-based provider of residential landline and broadband services and a subsidiary of The Carphone Warehouse Group Plc.

Update on June 30, 2009:

TalkTalk has received clearance from the European Commission to acquire Tiscali UK.

Announcement (May 8, 2009):

TalkTalk has entered into an agreement to acquire Tiscali UK for GBP236 million in cash.

Carphone Warehouse would fund the transaction from its existing debt facilities. The transaction is expected to be completed by the end of June 2009.

Rumor (April 27, 2009):

According to MarketWatch, the Daily Telegraph reported that The Carphone Warehouse, a UK-based provider of mobile communication products and services, and fixed line communication services, is planning to acquire Tiscali UK Holdings for approximately $291 million.

Deal Value (US$ Million) 355.66
Deal Type                Acquisition
Sub-Category             Majority Acquisition
Deal Status              Completed: 2009-07-03

Deal Participants

Target (Company)   Tiscali UK Holdings Limited
Acquirer (Company) TalkTalk Telecom Limited
Vendor (Company)   Tiscali SpA

Deal Rationale

This acquisition would strengthen TalkTalk's position as a provider of residential broadband services in the UK. The acquisition will enable TalkTalk to realize annualized savings of between GBP40 million and GBP50 million by March 2011. In particular these synergies will come from: Customer Migration - approximately 50% of Tiscali UK's broadband base is unbundled today, compared to 78% of TalkTalk's existing base. Within 24 months, it is expected that over 80% of the enlarged TalkTalk Group will be on a single, unbundled network, and this will produce significant savings. Network Integration and Simplification - Significant cost benefits can be gained by creating one integrated and simplified network. In particular, this will enable efficiencies associated with backhaul, the core network, and individual exchange costs. Billing Integration - TalkTalk expects to migrate the Tiscali customer base onto its own existing billing and customer relationship platform over the next 24 months.

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