Liberty Global Inc. (LBTYA) Acquires Virgin Media Inc. (VMED) for $23.3 Billion

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Further benefits of the combined company include complementary strengths across product suites, with both mobility and B2B expertise offering additional growth potential in key markets; significant potential to monetize its customer base; a substantial synergy opportunity, driven by scale advantages across core functional areas; accretive to free cash flow, with combined track record of exceptional free cash flow generation; and increased commitment to shareholder returns, leveraging the financial strength of the combined company, which generated $16.8 billion of revenue and $7.5 billion of operating cash flow in 2012.

Q4 and FY results
Understandably, today’s confirmation of the takeover overshadowed Virgin Media’s fourth-quarter and full-year results, which saw 2012 deliver a record year of cable customer growth.

Revenue increased 2.7% to £4.10bn for the year; up 1.6% to £1.04bn for the quarter. Operating cash flow lifted 4% to £1.65bn for the year; up 4.4% to £442m for the quarter.

There were multiple sources of high-quality revenue growth, with cable revenue rising 3% for the year, and up 3.8% in the quarter, while TiVo customers increased 896,900 in the year (187,300 in the quarter), paying TV customers lifted 210,000 in the year (59,900 in the quarter), and superfast broadband customers (30MB and above) increased 1.5 million in the year (419,400 in the quarter).

Virgin Media CEO Neil Berkett commented: “Mainstream demand for superfast broadband and TiVo has led to lower churn and a strong increase in new subscribers. Combined with growth in our business division, we have delivered solid financial progress.”

Top growth opportunity
Virgin Media has proved itself to be a top growth performer over the last few years, and today’s acquisition sees shareholders receive a 24% premium to the company’s closing price on Monday — on top of whatever gains they had made depending on when they bought their shares.

The article Liberty Global Acquires Virgin Media for $23.3 Billion originally appeared on and is written by Sam Robson.

Sam Robson has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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