UK telecoms buyout firm Zegona today booked a chunky profit by selling Telecable, a Spanish cable business, to Basque firm Euskaltel.
The shares plus cash deal values Telecable at €701m (£599m), less than two years after Zegona picked up Telecable for €640m.
Shares in Zegona leapt in morning trading as much as 10 per cent, while in Spain Euskaltel's share price rose over four per cent.
Zegona, which has a market cap over just over £300m, will receive €186.5m in cash. In addition, Euskatel will issue shares to the UK firm making it a 15 per cent owner of the Spanish company.
Telecable was purchased in July 2015 using a combination of equity funding from its March 2015 float and debt facilities provided by Goldman Sachs
Led by two former Virgin Media executives, Eamonn O’Hare and Robert Samuelson, Zegona seeks out European telecoms and media opportunities. It invests in companies and employs a "Buy-Fix-Sell" strategy.
O’Hare, Zegona’s chairman and chief executive, said the sale to Euskaltel "turns our vision into reality"
He added: “When we acquired Telecable in 2015, we identified the opportunity for substantial value creation through the combination of the three independent northern Spanish cable companies.
"We look forward to working closely with the Euskaltel Board and senior management team to help close the company's current valuation gap and assist in defining the next exciting chapter of Euskaltel’s development."
JP Morgan Cazenove acted as lead financial advisor with Oakley Advisory assisting Zegona on the transaction.