Capstone announced today that Green Dot, a telecommunications provider headquartered in Trinidad and Tobago, has received regulatory approval to sell a 51% stake to One Caribbean Media. The acquisition allows Green Dot to continue reaching new markets and rapidly growing its subscriber base.

Capstone Strategic, Inc. (Capstone) announced today that Green Dot, Ltd. (Green Dot) has completed the sale of a 51% stake to One Caribbean Media Limited (OCM).

The transaction between Green Dot and OCM was first announced in August 2016 and closed after receiving expected regulatory approval. Capstone advised Green Dot on the agreement including facilitating discussions between Green Dot and OCM and providing negotiations assistance.

Green Dot is the leading ISP provider and third largest provider of digital television services in Trinidad and Tobago. Founded in 2004, the company provides wireless ISP and subscription TV services to residential and business customers in Trinidad and Tobago, Grenada, and Suriname. OCM is a regional media group quoted on the stock exchanges of Trinidad and Tobago and Barbados under the ticker symbol OCM.

The acquisition combines Green Dot’s leading telecommunication services and strong subscriber base with OCM’s resources to lead to a mutually beneficial deal.

CEO Ketan Patel will continue leading Green Dot and will leverage OCM’s marketing expertise to further expand into other countries in the Caribbean region. OCM’s investment is part of the firm’s diversification strategy.

“Our move to join forces with OCM will allow us to accelerate our mission to expand and grow in the Caribbean. Capstone served as an important advisor throughout the acquisition process and their expertise has been extremely helpful in bringing this deal to a successful close,” said Ketan Patel, CEO of Green Dot.

“We are delighted to see the acquisition between Green Dot and OCM come to fruition so that the two companies can continue providing superior internet, telecommunication, and entertainment services in the Caribbean. It has been a pleasure working with them and we are excited for their future growth,” said David Braun, CEO of Capstone.

About Capstone Strategic, Inc.

Capstone Strategic, Inc. is a management consulting firm located outside of Washington DC specializing in corporate growth strategies, primarily mergers and acquisitions for the middle market. Founded in 1995 by CEO David Braun, Capstone has facilitated over $1 billion of successful transactions in a wide variety of manufacturing and service industries. Capstone utilizes a proprietary process, “The Roadmap to Acquisitions,” to provide tailored services to clients in a broad range of domestic and international markets. Visit the Capstone website at http://www.CapstoneStrategic.com.

About Green Dot

Green Dot, Ltd. was founded in 2004 and has since become the leading innovator in telecommunication solutions. Headquartered in Port of Spain, Trinidad and Tobago, the company offers wireless ISP and subscription TV services to residential and business customers in the Caribbean region. The Green Dot network has the capacity and capabilities to support today’s mission critical applications such as Virtual Private Networks, Voice and Video over IP, as well as bandwidth intensive applications such as Enterprise Resource Planning, Customer Relationship Management, and other Business to Business functions. Green Dot is committed to delivering world class solutions backed by unmatched customer support system. Visit the Green Dot website at: http://www.gd.tt.

 

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Verizon will acquire Straight Path Communications for $3.1 billion, beating out AT&T’s initial offer of $1.25 billion. The primary driver for the deal is accessing Straight Path’s millimeter wave spectrum which will be key to building a faster 5G network.

Disruptive technology and evolving consumer habits are reshaping the telecommunications industry at a rapid pace and both Verizon and AT&T have used acquisitions to stay ahead of the curve. AT&T recently acquired Time Warner for $85 billion to gain access to its content including HBO and CNN and Verizon acquired Yahoo! for $4.83 billion to boost its digital ad business.

Consumers are dropping landlines and cable TV and moving toward online streaming, especially on mobile devices. Social media has also reshaped where viewers get information and entertainment and media companies are struggling to adapt. For Verizon, using acquisition in along with organic growth, will help the company build an infrastructure to stay relevant with consumers. A 5G network will have higher speeds and greater capacity to keep up with downloads, video streaming, and other smart devices like Alexa, Google Home, or even automated vehicles. Companies that can anticipate and capture future consumer demand will remain successful and continue to grow, while others will be left behind.

Leaders in all industries should be aware of this dynamic and consider capturing future customer demand as a major driver for strategic growth. This means giving customers what they need and also what they don’t know they need. Amazon does an excellent job of this by suggesting items in their follow up emails base on strong algorithms. Think about how you can apply this principle to your current customers and your potential future customers and how you will go about fulfilling their needs.

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Capstone announced today that Green Dot, a telecommunications provider headquartered in Trinidad and Tobago, has entered into an agreement to sell a 51% stake to One Caribbean Media. The acquisition will allow Green Dot to accelerate subscriber growth and continue expanding into new markets.

Capstone Strategic, Inc. (Capstone) announced today that Green Dot, Ltd. (Green Dot) has entered into an agreement to sell a 51% stake to One Caribbean Media Limited (OCM).

Green Dot, headquartered in Port of Spain, Trinidad and Tobago, is a licensed
telecommunications operator offering wireless ISP and subscription TV services to residential and business customers in Trinidad and Tobago, Grenada, and Suriname. OCM is a regional media group quoted on the stock exchanges of Trinidad and Tobago and Barbados under the ticker symbol OCM. The acquisition will close subject to expected regulatory approval.

Green Dot was established in 2004 and under the leadership of CEO Ketan Patel has grown to be an established telecom service provider with a highly recognized brand name. Green Dot is the third largest provider of digital television services and the leading ISP provider in Trinidad and Tobago. Since its founding, the company has also expanded into Grenada and Suriname and is in the process of expanding into other countries in the Caribbean region.

The acquisition will allow Green Dot to leverage OCM’s marketing expertise and resources to continue distributing exclusive content to a growing subscriber base. With OCM’s investment, Green Dot can accelerate subscriber growth and continue expanding into new markets. OCM will use Green Dot’s robust infrastructure and bandwidth to promote new media content and continue its strategy of diversification in the region.

Capstone advised Green Dot on the agreement including facilitating discussions between Green Dot and OCM and providing negotiations assistance.

“Our partnership with OCM is the next step in growing Green Dot and expanding throughout the Caribbean,” said Green Dot CEO, Ketan Patel. “We are happy to have Capstone as our M&A advisor guiding us through the transaction. Their expertise, counsel and professionalism were instrumental in putting together the deal.”

“We are excited to help Green Dot continue expanding in the Caribbean. In partnering with OCM, Green Dot will execute on its strategic plan to grow in the region and bring innovative products and services to more customers,” said Capstone CEO David Braun.

“We are extremely pleased to invest in Green Dot and execute OCM’s diversification strategy. Working with the team at Green Dot and Capstone, we were able to put together a mutually beneficial deal that will help us grow strategically for years to come,” commented Dawn Thomas, the CEO of OCM.

About Capstone

Capstone Strategic, Inc. is a management consulting firm located outside of Washington DC specializing in corporate growth strategies, primarily mergers and acquisitions for the middle market. Founded in 1995 by CEO David Braun, Capstone has facilitated over $1 billion of successful transactions in a wide variety of manufacturing and service industries. Capstone utilizes a proprietary process, “The Roadmap to Acquisitions,” to provide tailored services to clients in a broad range of domestic and international markets. Visit the Capstone website at www.CapstoneStrategic.com.

About Green Dot

Green Dot, Ltd. was founded in 2004 and has since become the leading innovator in telecommunication solutions. Headquartered in Port of Spain, Trinidad and Tobago, the company offers wireless ISP and subscription TV services to residential and business customers in the Caribbean region. The Green Dot network has the capacity and capabilities to support today’s mission critical applications such as Virtual Private Networks, Voice and Video over IP, as well as bandwidth intensive applications such as Enterprise Resource Planning, Customer Relationship Management, and other Business to Business functions. Green Dot is committed to delivering world class solutions backed by unmatched customer support system. Visit the Green Dot website at: www.gd.tt.

About One Caribbean Media

One Caribbean Media Limited was created in January 2006 from the merger of two of the region’s most distinguished and long-standing media enterprises, the Caribbean Communications Network (CCN) Group (Trinidad and Tobago) and the Nation Corporation Group (Barbados). Today OCM is the largest and most diversified media organization in the Caribbean region with businesses in newspapers, radio and television. Visit the OCM website at: www.onecaribbeanmedia.net.

As expected, a wave of M&A activity among European telecoms has begun. Last week, UK’s Vodafone bought Spain’s Ono for $10 billion. Vodafone most recently sold a 45% stake to Verizon Wireless valued at $130 billion.

When Vodafone purchased Kabel Deutschland for $7.7 billion euros last July, Capstone predicted an increase in M&A activity in 2014 due to an improved economic environment and regulatory reforms. This analysis still stands. Reuters Breakingviews also forecasts a rise in European telecom M&A, following a string of cable M&A activity.

Multiple factors are fueling consolidation among European telecoms. These include cheap debt due to historically low interest rates and a growing number of companies involved in M&A amid a rising stock market that has led to more public offerings.

In addition, we see consolidation fueling consolidation as executives worry about being left behind by competitors, including those overseas. The European telecom market is overpopulated and segmented, leaving few players with the size necessary to undertake the massive CAPEX needed to sustain growth and modernize telecoms.

Here are some telecom companies to look out for as M&A activity picks up:

  • AT&T – While AT&T says the window for wireless deals in Europe may be closing, there may yet be potential for a deal. As of January, AT&T was still considering a takeover of Vodafone; given Vodafone’s latest M&A activity, this now seems unlikely.
  • Hutchison Whampoa – Last year, Hong Kong’s Hutchison Whampoa purchased Telefonica’s Irish unit for $1.1 billion. Its chairman, Li Ka-Shing, announced it is considering more acquisitions in Europe for 2014.
  • Telefonica – The European commission has raised concerns over Telefonica’s acquisition of E-Plus for $11.5 billion. Despite this, Telefonica reportedly is close to buying a 56% stake in satellite TV provider Prisa.
  • Vivendi –Vivendi has agreed to exclusive talks with Altice for its mobile phone unit.
  • Vodafone – After its latest cross-border deal, there are rumors that Vodafone may turn its attention closer to home for its next acquisition.
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Vodafone’s cash buyout of Kabel Deutschland for 7.7 billion Euros has the European telecom M&A scene heating up. AT&T, for one, is rumored to be eyeing Europe for suitable acquisitions ─ perhaps even Telefonica, Spain’s leading multinational.

In the past, such deals would have been considered one-off acquisitions reserved for large corporations with the power and the clout to successfully navigate the EU’s regulatory web. However, if a new M&A wave materializes, middle-market firms are likely to participate in the deal-making.

A New Wave of M&A?

M&A activity may pick up among European telecoms of all sizes, given market conditions and the economic crisis. In Europe, there are 1200 national fixed telecom operators and 100 mobile networks, although 80% of the customers subscribe to the four biggest providers.

The recession and sovereign debt crisis have depressed revenues industry-wide and are drying up financing for the smaller players. This has deprived these companies from making large-scale investments needed to keep up with the competition. In this context, consolidation appears to be a sound strategy for European telecoms.

While market fragmentation, customer concentration, and precarious economic conditions have always been present in at least some areas in Europe, M&A activity in this sector has historically been stifled by the regulatory burdens imposed by 27 national telecom regulators, 27 national competition regulators, and the European Commission.

European regulators now are introducing a package of reforms designed to encourage consolidation and European-wide integration without caving in to the industry’s demand for radical deregulation.  Regulators hope to create an “airline-style” system of alliances in Europe between mobile operators carrying customer data. That would further open national markets, streamline spectrum allocation, and end mobile roaming and connecting fees.

These new changes would lower the barriers to entry for the European giants as well as foreign companies like AT&T. If adopted, the new rules would help clear the way for increased M&A activity.

Go Big or Cash Out

So what does this mean for small and middle-market telecom companies? The news is bittersweet.

On the one hand, European middle-market companies would gain easier access to buyers willing to pay handsome EBITDA multiples. Vodafone’s CEO,  for example, described the high price paid for Deutsche Kabel as “full, but fair,” for the British company’s long term future.

On the other hand, middle-market firms would face a more competitive environment. While the new regulations would make M&A easier, they also would ­decrease the power of national regulators that in the past protected smaller national players. Smaller companies would face competition from domestic players and multinational rivals like AT&T. In addition, the new rules might even force some of the smaller firms to consolidate by eliminating their roaming revenues.

With changing regulations, executives of healthy middle-market European telecoms would need to re-examine their growth strategy. Small and middle-market telecoms would need to decide between being bought, participating in their own acquisition, or finding another way to remain strategic in a changing market. Ultimately, anticipating changes and acting proactively is the key success for European telecoms.

*Paul Marin, Capstone Research Analyst, contributed to this post

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