Proximus A rough OPAL waiting to be polished
In July, Proximus announced that it would acquire a majority stake in the Indian listed CPaaS player Route Mobile, with the intention to combine it with its own CPaaS and Digital Identity business Telesign. The two businesses will be combined under the new entity OPAL, hereby referring to the gemstone. In this note, we take a closer look at the financials of OPAL until 2026. Overall, we believe the transaction makes sense as it will give Telesign the scale and synergies needed to succeed in a competitive market. Besides, the transaction reconfirms the record € 1.4bn valuation for Telesign whilst the cash out for Proximus will remain limited, hereby keeping the leverage below the targeted 3.0x. Although some uncertainty remains regarding the entry of Citymesh, we believe Proximus' underperformance in the recent years is overdone. Based on our revised estimates, we increase our rating from Hold to Accumulate, but lower our TP from € 9.1 to € 8.7 ps.Proximus supplies integrated telecommunications services on the Belgian market. Co.'s activities are divided into four segments: Consumer Business Unit (CBU), which sells voice products and services, internet and television, on fixed and mobile networks, to residential customers; Enterprise Business Unit (EBU), which caters to professional customers; Service Delivery Engine and Wholesale, which centralizes all the network and IT services and costs, provides services to CBU and EBU and sells these services to other telecom and cable operators; and International Carrier Services, which focuses on international carrier activities.
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