Publishing Date: Feb 09, 2021

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PRESS RELEASE: Last summer, Proximus communicated to the market that the shareholders of BICS (Belgacom International Carrier Services) were exploring a potential sale of 51% of the company’s shares. After investigation of different options, Proximus has concluded that the best way to have the necessary flexibility to create long-term value for BICS and TeleSign was to acquire 100% ownership of BICS.

The agreement leads to the acquisition of the minority stakes of MTN and Swisscom at an attractive valuation. BICS is in the international carrier market with a proven track record and a clear path towards future growth in a business well mastered by Proximus. From a financial point of view, this acquisition allows Proximus to combine the robust free cash flow generation of BICS with the attractive revenue growth of TeleSign.

Going forward Proximus will execute the growth plan of BICS and TeleSign, through a combination of organic investments in key growth domains, a strict focus on cashflow generation within the legacy business and an active role in capturing consolidation opportunities. At the same time MTN and Swisscom will remain important commercial partners of BICS. The combination of the above creates a strong perspective of sustainable value creation for the Proximus shareholders.


Two complementary players, well positioned to leverage further growth

As a global leader in digital communications, cloud communication services, mobility and IoT, BICS addresses business-critical needs of telecom players, virtual network operators, service providers, enterprise software providers and global enterprises.

Relying upon its leading operating platforms and its global scale, BICS has considerably diversified its activities over the past years, showing strong growth potential in new business domains such as roaming, IoT and cloud communication. At the same time, BICS is one of the few players with the critical mass required to realise economies of scale through consolidation in a highly fragmented market. Therefore, whilst impacted by worldwide travel restrictions during the Covid-19 pandemic, BICS is set to recover progressively as these measures are eased.

TeleSign is a fast-growing digital leader specialized in authentication and digital identity services to the world’s largest internet brands, digital champions and cloud native businesses. Since the acquisition by BICS, it has achieved an impressive double-digit revenue growth year after year. With the recent appointment of Joseph Burton as CEO, TeleSign will enjoy increased autonomy to focus on accelerating its growth, leveraging its technology and global scale to help the world’s largest enterprises with the digital transformation of their businesses. The TeleSign growth strategy is centred around driving further product innovation and differentiation, while exploring possibilities for geographic expansion.

As BICS and TeleSign transition to independent growth paths, they will sharpen their focus on execution in their respective markets while reinforcing operational synergies.


Financial highlights of the transaction

In 2020 BICS realised an EBITDA of EUR 131 million and a free cash flow of 64 million, a flat YoY FCF evolution despite the Covid-19 impact.

The enterprise value of the transaction amounts to €569 million. This implies a 4.4x EBITDA multiple. The expected cash outflow for Proximus amounts to €217 million in 2021, taking into account the company’s net debt and customary debt-like items adjustments. The transaction will be FCF accretive for Proximus as of year one (transaction FCF yield of 11% vs. Proximus trading at a 2019 FCF yield of 6%), thanks in part to the elimination of dividends to minority shareholders within Proximus consolidated financial accounts (€26 million in 2020).

Proximus is confident that the increased strategic flexibility gained through this transaction, the intrinsic growth potential of both TeleSign and BICS and the prospects of a gradual recovery of the Covid-19 pandemic leave material upside relative to the transaction enterprise value.

The transaction will be financed by relying upon Proximus’ existing €700 million credit facilities. The transaction does not alter Proximus’ intention to return an annual gross dividend of €1.20 per share for the earnings of 2020, 2021 and 2022, to be considered as a floor. Proximus also remains committed to its overall capital allocation strategy as presented during the Fibre Update on 13 January 2021.

Proximus has been advised by Perella Weinberg Partners (financial) & Linklaters (legal).


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