Ahead of their preliminary results for the year ended 31 March 2006 being announced on 19 June THUS has reached agreement in principle for the sale of its Internet Service Provider Demon Netherlands to Dutch telecommunications company Royal KPN NV. As announced by the Company on 1 February 2006 in a statement about future strategy, the sale will enable THUS to reinforce its focus on the UK business telecommunications market.
Consideration for the sale will be €69m before tax (approximately £47m). The consideration, payable in cash on completion of the transaction, will be used to reduce the Company’s existing bank debt.
For the year ended 31 March 2006, revenue for Demon Netherlands was €28.9m – approximately £19.8m, with EBITDA (earnings before interest, tax, depreciation and amortisation) of £2.2m. As at 31 March 2006, gross assets were £5.3m and the business had approximately 70,000 customers.
The sale is subject to the advice of the Works Councils of both Demon Netherlands and Royal KPN NV.