- The transaction combines Silknet’s broadband, pay TV and fixed telephony operations with Geocell’s mobile operations, creating a major convergent telecom company
- Expected synergies will provide Georgian consumers with enhanced access to voice and data services and exclusive global content
Tbilisi, January 26, 2018. – Silknet announced today the successful acquisition of Geocell, the second-largest mobile operator in the Republic of Georgia, after reaching an agreement with Geocell’s shareholders, Telia Company (STO:TELIA) and Turkcell (NYSE: TKC, IST: TCELL).
The acquisition, which values Geocell at USD 153 million, will be financed through a combination of debt – a syndicated loan arranged by TBC Bank with other Georgian and regional banks – and equity. The transaction creates a major convergent telecom operator in the Republic of Georgia, combining the assets of the country’s largest fixed-line company, Silknet, with the mobile telecommunication activities of Geocell.
Georgian consumers can expect significant benefits from the combination, thanks to new planned convergent broadband, pay TV, mobile and fixed telephony offerings, including enhanced mobile access to Silknet’s exclusive content such as global sport competitions. Silknet is a member of Orange Alliance. This program from Orange, a global telecom company, contributes to independent operators’ growth and operational efficiency by leveraging on the experience and know-how of a major world class operator.
“This transaction allows us to create an integrated telecommunications operator, combining fixed line and mobile technologies. The larger scale will provide the company with superior access to international capital markets, further ensuring continuous investment in new technologies. Our subscribers will greatly benefit from these endeavors, as we strive to provide Georgian consumers with even better products, services and content.” said George Ramishvili, the Chairman of Silknet and of its parent company, Silk Road Group. “We are delighted to welcome to the Silknet team Geocell’s first-class employees and its corporate culture of excellence. This transaction furthers our long tradition of integrating Georgia with the wider world, and we expect that it will strengthen the development of Georgia’s digital infrastructure.”
Subject to approval of the local regulatory authorities in Georgia, the acquisition is expected to be completed in the second quarter 2018.
Houlihan Lokey and Erneholm Haskel served as the financial advisers on the transaction, and Dentons served as the legal adviser.
Silknet was founded in 2010 in the Republic of Georgia, through a consolidation of assets of several local telecommunications companies. It is today the largest cable network in the country, offering broadband, pay TV and fixed telephony, as well as fixed and mobile CDMA services. In 2015 Silknet began to offer 4G LTE data services and today boasts the largest carrier service operations in the region. In August 2017, the Company issued its first public bonds denominated in local currency.
Silknet is a subsidiary of The Silk Road Group (SRG), founded in 1997 by George Ramishvili and owned by three partners: George Ramishvili, Alex Topuria, and David Borger. SRG is one of the leading private investment groups active in the Caucasus and Central Asian regions with participation in different sectors of the Georgian economy, including transportation, trading, real estate, hospitality, telecommunications and others.
Today, SRG employs around 5,000 people in the country. Jointly with its partners, SRG has facilitated investments of around USD 500 million into the Georgian economy over the last ten years.