Salt, Switzerland’s third largest telecoms business, is aiming to list on the Zurich stock exchange in the autumn, in a deal that may value the company at over 2.5 billion Swiss francs (US$2.7 billion), according to three people familiar with the situation. After seven years of investment, French entrepreneur Xavier Niel is looking for a way out, they said.
According to the persons, the company plans to sell shares worth around 700 million Swiss francs (US$757 million), mostly fresh shares from a capital increase.
The floatation is being organized by Credit Suisse, Goldman Sachs, Morgan Stanley, and BNP Paribas, according to them.
Salt stated that the company and its owner are examining several financing possibilities, including an initial public offering (IPO), but that no decisions have been made. The banks either declined to respond or could not be reached right away. Last year, Salt earned 421 million francs in adjusted earnings before interest, taxes, depreciation, and amortisation on revenues of 1 billion francs. Core earnings were down 3% in the first quarter, while sales were up 2.5 percent.
Swisscom trades at roughly 8 times projected core earnings, according to a source familiar with the situation, and Salt, which competes mostly on pricing, should expect a 20-25 percent valuation reduction compared to the incumbent.
According to the people, Salt’s IPO might be worth over 2.5 billion Swiss francs, including debt.
In 2014, Niel purchased Salt, formerly Orange Communications, from buyout firm Apax for 2.8 billion Swiss francs. Salt, on the other hand, has reaped the benefits of dividend payments and streamlined the firm through transactions such as the selling of Salt’s telecoms towers to Cellnex. The telecommunications business in Switzerland has been consolidating in recent years, with Liberty Global’s 6.8 billion Swiss franc acquisition of Sunrise Communications closing in late 2020, bringing the number of major competitors down to three from four.
Salt and Swisscom announced a fiber-optic collaboration earlier this year, allowing Salt to provide fiber-to-the-home connections to 3 million consumers by 2025.
(One US dollar is equal to 0.9241 Swiss francs.)
(Kirsten Donovan edited the piece.)/nRead More