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LONDON, July 27 (Reuters) - An investment vehicle set up bytwo former Virgin Media executives bought Spanish cable operatorTelecable for $706 million including debt on Monday, putting itat the centre of Spain's telecom sector its first deal.
The operator from northwest Spain was bought by Zegona, formed by Eamonn O'Hare and Robert Samuelson, whohelped build up and then sell Virgin Media in 2013.
The deal is the fourth big telecoms deal in Spain in thelast 18 months, after Vodafone bought Ono, Orange snapped up Jazztel and Euskaltel last weekagreed an offer for R Cable.
O'Hare told Reuters he saw Monday's deal as a strategic movewhich would give it an opportunity to be involved in any furtherconsolidation in the sector.
Founded in 1995 and supplying TV, broadband, fixed andmobile telephony, Telecable has more than 162,000 residentialand corporate customers, giving it revenue of 131 million eurosand core earnings of 63 million in 2014.
It was owned by Carlyle Group and Liberbank.
With Telecable surviving the economic downturn to growrevenue every year for the last five years, O'Hare believes itis set to grow revenue and earnings more rapidly.
He plans to expand it into the business sector, ramping upavailable speeds and pushing the supply of mobile and pay-TVservices to existing customers, a tactic which worked well withVirgin in Britain.
The deal is the first acquisition for Zegona, which was setup to buy and run businesses in the European technology, mediaand telecoms sectors.
It will fund the acquisition with a combination of 251million pounds ($390 million) of new equity, backed byinstitutional investors, funds from Zegona's recent float and adebt facility arranged by Goldman Sachs.
The fundraising was backed by institutions including Capitaland Fidelity. Marwyn, an existing investor, also backed thedeal. ($1 = 0.6439 pounds)($1 = 0.9062 euros) (Reporting by Kate Holton; Editing by Louise Heavens and DavidHolmes)
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