Mid Europa Partners said Tuesday that it has entered an agreement to sell its stake in SBB/Telemach Group to KKR. No financial terms were disclosed. Credit Suisse served as the exclusive financial advisor to Mid Europa in the transaction, which is expected to close by the first quarter of 2014. SBB is a Serbian pay TV and broadband internet provider.
Mid Europa Partners (“Mid Europa”), the leading private equity firm in Central and Eastern Europe and Turkey, announced today that it has entered into a binding agreement for the sale of its investment in the SBB/Telemach Group (“the Group”) to funds affiliated with Kohlberg Kravis Roberts & Co. LP (“KKR”). The transaction is subject to customary regulatory approvals by local competition authorities, and is expected to close by Q1 2014. The transaction provides Mid Europa with approximately 3.0x MoM blended return on its investment through two funds. The transaction represents the largest private equity exit in the former Yugoslavia (the “Region”).
Mid Europa acquired SBB, the leading Serbian pay TV and broadband Internet provider, in 2007, and has since supported extensive investment in organic growth which has expanded the company’s footprint to six regional countries. In parallel, an extensive consolidation strategy has been pursued, acquiring 18 businesses which together with the original SBB investment comprise the Group today. During Mid Europa’s ownership, the Group has grown EBITDA at an annual rate of 37%, and today offers cable and satellite TV, Internet and fixed and mobile telephony services to 1.8 million RGUs across six regional countries.
Robert Knorr, Senior Partner of Mid Europa who leads Mid Europa’s investments in South East Europe commented: “This transaction validates our strong conviction that the region offers attractive investment opportunities and demonstrates Mid Europa’s ability to create value through our intimate knowledge of regional markets and our hands-on ownership approach. We have taken a national champion and transformed it into a pan-regional leader and best in class operator by global standards – a success story that was made possible through the combination of a strong business, operating in an attractive region, an exceptional management team, and the flawless execution of a complex buy and build and organic regional expansion strategy”.
Andrej Babache, Associate Director of Mid Europa who led the execution of the transaction commented: “In addition to consistently delivering industry-leading operating and financial performance in each year of our ownership, this investment and the transactions that have created it, have marked a number of milestones that demonstrate Mid Europa’s strong execution capability: the first LBO in Serbia, the first LBO in CEE post the collapse of Lehman Brothers, the first CEE recapitalisation with multi-jurisdictional debt pushdown and now one of the largest CEE private equity exits”.
Dragan Solak, founder and Chairman of the Group, commented: “The Group is one of the fastest growing pay TV providers worldwide. Our partnership with Mid Europa has seen the Group deliver excellent growth, becoming the leading home entertainment and communication services provider across the region, and ready to approach the exciting future opportunities ahead of it with our new partner”.
The Mid Europa execution team comprised Andrej Babache, Stefan Tzvetkov, Viktoria Habanova, Matthias Dukat and Krzysztof Jedrzejek.
Credit Suisse acted as the exclusive financial advisor to Mid Europa.
ABOUT MID EUROPA PARTNERS
Mid Europa Partners is a leading independent private equity firm focused on Central and Eastern Europe and Turkey. Operating from London, Budapest, Warsaw and Istanbul, Mid Europa Partners advises and manages funds of approximately €3.2 billion in aggregate. The Mid Europa Partners team has been investing in the region since 1999.