Venture capital investor acquires minority holding in Finnet

print this

Venture capital investor 3i is set to purchase a minority holding in the Finnish data communications group Finnet, which is planning to go public.
      The Finnet group consists of 28 locally operating telephone companies and the Finnet Association, a trade and operational political interest group and cooperation forum of the Finnet group.
     
A total of 18 small regional operators, having been left as minority shareholders, will relinquish their shares.
      3i is to purchase a minority holding of 25 per cent in the company, for which the capital investor will pay EUR 140 million as a cash transaction.
      In practice, the deal means that 3i is buying 25 per cent of the shares of mobile operator DNA, a subsidiary of Finnet Oy. In 2006, DNA accounted for EUR 365 million of Finnet's net sales of EUR 406 million, and generated operating profit of some EUR 43 million, while Finnet's aggregate figure was EUR 37.6 million.
     
The Finnet group split into two parts at the turn of the year, when five large regional operators started to turn Finnet into a nationwide telecommunications group.
      The operators in Oulu, Kuopio, Lahti, Rauma, and Pori will now combine their own business operations with Finnet Oy, which used to be practically the same as mobile operator DNA Oy.
      While the remaining 27 small small regional operators were not willing to join the new group, the majority of them decided to sell their stock in Finnet Oy.
     
The group owns one-third of Finnet. However, the venture capital investor will get only one-quarter of the company, as not all operators are willing to give up their shares. Among those are the regional operator in Vaasa, with a good seven per cent of the shares, as well as a few other small operators.
      Reportedly, several other buyers have also expressed their willingness to buy a minority holding in Finnet.
      The aim of the large regional operators is to combine their own business operations with Finnet Oy at the beginning of July. Through these transactions the shareholding of these operators in Finnet Oy will grow from the current two-thirds to around 80 per cent, and 3i's holding in the larger entity will decline accordingly.


Links:
  Finnet Group

Helsingin Sanomat