Published on: February 19, 2020

Acquisition in Spain

Gamma has made an offer to acquire VozTelecom (currently trading on the Mercado Alternativo Bursátil), one of the leading Cloud PBX providers in Spain, for an implied enterprise value of around €30.5 million (£25.3 million). In our view, the deal represents further progress in delivering on the Group’s strategy of expanding its footprint in Western Europe through an acquisition in another of its previously-identified target markets. Spain has a sizeable PBX market with a low level of cloud penetration and provides Gamma with the opportunity to invest in accelerating VozTelecom’s growth in an attractive market. The price implies an EV/EBITDA multiple of 12.2x VozTelecom’s pro forma (including recent M&A) 2019 EBITDA compared to our respective estimate of 19.3x for Gamma. Gamma’s net cash position stood at £53.8 million at the end of 2019 and the deal will be financed from that cash resource. We leave estimates unchanged ahead of Gamma’s upcoming full-year results and note that the acquisition will progress as a takeover offer under the relevant Spanish legislation.