In February 1999, we co-led a $72m investment in Jazztel, a Spanish provider of high bandwidth voice and data services.
A new entrant in the then newly deregulated Spanish telecoms market, Jazztel was led by a highly capable management team with an entrepreneurial track record. The company's initial focus was on building state-of-the-art fibre-optic networks in key Spanish cities. Demonstrating strong execution capability, Jazztel placed emphasis on forging strategic alliances with suppliers such as Nortel and Sainco who were critical to the efficient outsourcing of its network construction.
In parallel, the company also placed a high priority on building its brand - focusing heavily on sales and marketing activities - and within a short space of time had successfully positioned the business as one of the best-known companies in Spain. Driven by the need for significant investment to enable the continued expansion of its networks, we helped the company raise $620m through two high-yield debt offerings - the first dollar denominated high yield offerings by a Spanish company - and in December 1999 raised a further $172m through a joint flotation on Nasdaq and Easdaq. In 2000, Jazztel secured the largest gains in Spanish fixed telephony, capturing 30% of the market share lost by Telefonica. Capitalising on the strength of its brand and its leading position in the business-to-business market, Jazztel then began to diversify into other market segments, rolling-out a range of residential and internet services and embarking on an acquisitions programme targeting ISPs and software/technology companies.
Ya.com, its internet portal subsidiary, grew extremely rapidly and was sold to T-Online, a subsidiary of Deutsche Telekom, for €500m in October 2000 - just a year after it was launched. The acquisition of wireless broadband licenses for both Spain and Portugal facilitated the introduction of more sophisticated voice, data and internet services and the launch of Jazztel Portugal. Despite difficult market conditions, Jazztel has continued its rapid growth since its IPO and the company is now positioned as the leading alternative provider of high-bandwidth data, internet and voice services for small and medium-sized enterprises in Spain and Portugal.