Ziggo is the largest cable network operator on the Dutch market. It is the result of a three-way merger, led by shareholders Warburg Pincus and Cinven. They paid a total of EUR 5.6 billion, including external debt, which turned the holding company (Zesko) into a highly leveraged entity. Both at Ziggo and Zesko the net debt/EBITDA ratio is improving. Based on a comparison of multiples at listed peers, we suggest a possible enterprise value of EUR 7.3 billion, which would produce a return of roughly 23 percent per annum (CAGR) for the current shareholders. In this Research Brief, we take a closer look at the company's balance sheet and valuation and lay out the implications for a possible IPO.
