Kohlberg Kravis Roberts has agreed to acquire East European cable operator SBB/Telemach in a deal valued at around EUR1 billion.
According to reports, KKR beat competition from Liberty Global and private equity rivals Providence and Cinven to buy Belgrade-based SBB/Telemach from another private equity company, Mid Europa, who acquired SBB in 2007.
Regional operator SBB/Telemach Group operates in the former Yugoslab markets of Serbia, Slovenia, Bosnia, Croatia, Montenegro and Macedonia and has around 1.7 million cable and satellite TV, broadband, fixed and mobile customers. These markets have low broadband payTV and broadband penetration with high growth potential.
“This is our first direct investment in Southern Eastern Europe. It adds to our investments in more than 40 European companies across 12 countries and it is a sign of our confidence in the prospects of SBB/Telemach Group, led by Dragan [Šolak, Founder and Executive Chairman of the SBB-Telemach Group] and his talented team, and in the region,” said KKR's co-founder and co-CEO Henry Kravis.
The transaction is subject to customary approvals and is expected to close around year-end 2013.
Estonia's largest cable TV operator Starman acquired by East Capital Explorer
Swedish investment group East Capital Explorer has agreed to buy 51 per cent of Estonia's largest pay TV player, Starman, for €24m. At the same time Starman's co-founders increased their shares in the company after investing an additional €5m: Peter Kern-owned OU Com Holding increased its stake to 34.3 per cent (from 20.9 per cent), while Indrek Kuyvallik's OU Polaris Invest increased its stake to 14.7 per cent (from 11.3). The transaction is now subject to approval by the Competition Office. The shares were sold by Starman's former owner, Xalto CDO II BV owned by Bancroft Group.
Straman is Estonia's largest cable TV operator, with about 130,000 cable TV and about 60,0000 broadband subscribers. Since 2006 it has also been providing a pay DTT service, Zoom TV. In 2012 the company made €28m revenues with EBITDA €13m. East Capital Explorer is listed on Stockholm Stock Exchange. The company was established in 2007 and it focuses on Eastern European markets, investing primarily in the financial, utility, and industrial sectors.
According to Starman's 2008 annual report, which was the last report it published while still listed on the Tallinn Stock Exchange, it ended 2008 with 137,000 cable TV and 54,000 Internet subscribers. Since then the operator's TV subscriber base has shrunk, and the number of Internet customers has grown only slowly. Moreover, in spite of investments rolling out digital TV on cable, a considerable part of Starman's cable subscriber still prefer analogue TV.
These rather unimpressive results are primarily due to fierce competition in the Estonian TV and telecommunications markets. Starman competes with the incumbent telco, TeliaSonera-owned Elion, providing telephony, Internet and a growing IPTV service, as well as Viasat's satellite TV platform, its only competitor in rural areas, as well as other cable TV operators, with country's second largest cable TV player, STV.
As the pay TV market in Estonia is close to saturation, the competition is getting even fiercer. After switching off analogue terrestrial TV in 2010, pay TV continued to grow, but during 2012 it increased only about one per cent, exceeding 90 per cent of homes.
Under such circumstances, with the growth in terms of subscribers becoming much more difficult, the pay TV players will be focusing on strengthening their offers,lowering churn and increasing ARPU. Funds from the new investor should help Starman to move all of its subscribers to the digital service and make its offer more competitive. Among the likely developments are the launch of more HD channels (currently 10), extending the VOD offer and adding multiscreen service to its portfolio.
The transaction is another example of the interest that International investment groups are showing in Eastern European cable TV. Recently Warburg Pincus acquired a minority stake in Poland's sixth largest cable TV player, Inea; in March this year, Mid Europa Partners, owing among others Serbia's largest cable TV service, SBB, and a cable operation in Bosnia (both under the brand Telemach) continued acquisitions in Bosnia by buying a local service called Art-Net. Other investment groups active in the region include: Advanced Broadband, Argus Capital, AXA, BKS Capital Partners, Contaq and EQT.
Slovenia’s Telemach joins Mid Europa’s United Group
Slovenian cableco Telemach has joined the United Group, which includes a number of telecoms operators across eastern Europe. The United Group, which is majority owned by Mid Europa Partners (MEP) and the European Bank for Reconstruction and Development (EBRD), already includes Serbia Broadband (SBB), Telemach Bosnia & Herzegovina, DTH platform Total TV (which covers Slovenia, Croatia, Bosnia & Herzegovina, Serbia, Montenegro and Macedonia) and a further 15 small operators, including Absolut OK, KDS NS, Jet TV, Beogrid, Telekabel, VI-NET, and ArtNet. Commenting on the development, Telemach director Marko Ster said that sharing best practice and seeking synergies would help improve services.
According to the United Group, Telemach customers will be able to see the first benefits from 1 May, when the group’s operators will start to offer free calls between Slovenia, Serbia and Bosnia & Herzegovina. MEP has been active in the region since 2007, initially through its investment in SBB and later through its acquisition of Telemach, which was previously owned by Liberty Global Inc (LGI). The United Group currently claims 1.65 million revenue generating units (RGUs) and presides over a unique infrastructure that covers a large part of Slovenia, Serbia and Bosnia & Herzegovina and includes over 10,000km of fibre-optic networks, connecting to Belgrade, Zagreb, Ljubljana and Sarajevo. In the twelve months ended 31 December 2012 the United Group generated revenues of EUR180 million (USD234.4 million), with capital expenditure exceeding EUR50 million.
Milestone Communications Inc. Activities 2012
Press Release
April 2, 2012
Castle Pines, CO – Milestone Communications, Inc., a leading brokerage firm service the cable telecommunications industry, served as advisor to Inside Connect, LP in their purchase from Crystal Broadband Networks, Inc. of its cable television systems serving portions of Breckinridge and Hancock Counties in Kentucky. Michael W. Drake of Milestone Communications represented Inside Connect, LP in the transaction.
Press Release
March 30, 2012
Castle Pines, CO – Milestone Communications, Inc., a leading brokerage firm service the cable telecommunications industry, served as advisor to Atlantic Broadband Finance, LLC in their purchase from Mapleton Community TV Antenna Corporation of its cable television system serving 158 EBU’s serving the community of Mapleton, Pennsylvania. Michael W. Drake of Milestone Communications represented Atlantic Broadband Finance, LLC in the transaction.
Volia continues consolidation of Ukrainian cable TV
Ukraine's Competition Office gave the country's largest cable TV operator, Volia, the green light to buy a majority stake in Ukraine's third largest cable TV player, PPF-controlled, Odeko Group. According to local sources, Volia paid $14m for the stake in Odeko.
In 2008 PPF Partners acquired 25 small cable TV players in Ukraine, creating Odeko Group. As of mid-2012 the operator provided triple play and digital TV services to about 200,000 RGUs in 11 cities in Western Ukraine.
Volia is one of the assets of UGF III and SGFII, private equity funds managed by SigmaBlayzer. The operator's shareholders include Providence Equity Partners.
In the fourth quarter of 2012 there are still about 550 cable TV operators in Ukraine. The vast majority are small players, typically providing only up to 50 analogue channels. Cable TV penetration has been stuck at the same level - around 20 per cent of homes - for the last few years. Cable operators have cut their investments in network roll-out, primarily due to the unfavourable economic situation. On the other hand, difficult economic conditions are accelerating consolidation in the market, with many players looking to sell.
Volia acquisitions-based strategy has itself been a major driver of consolidation. The operator has grown from about 500,000 TV subscribers in 2008 to over 1.3m in mid 2012. The acquisition of Odeko Group will extend Volia's network to about 3.4m homes passed, pushing its TV subscriber figure to 1.5m and its share of the cable TV market to well over 40 per cent in terms of subscribers.
In practically every Central Eastern European country there are a great number of cable TV providers, with the top three to four players holding over 50 per cent of subscribers and gradually increasing their shares of cable TV. There are also many other investment groups active in the cable TV market in central and eastern Europe. Some of them are pursue a similar strategy to PPF, purchasing a number of smaller players - for example, BKS Capital Partners in the Czech Republic. Most of them, however, prefer a strategy similar to Volia's investors: backing up a large player, with which they keep acquiring other, primarily big, operators: for example, AXA in Latvia, EQT in Bulgaria and Macedonia, or Liberty Global in Poland. Liberty's UPC, having bought Poland's fourth largest player, Aster, in 2011, is now likely to acquire the country's third largest operator, Multimedia Polska, which was put on the block by its owner, Emerging Ventures Limited, a few months ago.
A recent decision by the Ukrainian broadcasting regulator may accelerate the process of consolidation of the cable platform in the country. The regulator gave must-carry status to all free-to-air DTT channels broadcasting in the country. As Ukraine launched digital terrestrial TV in DVB-T2 standard there are now over 30 such channels, mostly small once. Broadcasting such a high number of free to air channel will considerably limit channel-line up of small players, most of which will find upgrading to digital too expensive.
Milestone Communications Inc. Activities 2011
Press Release
December 16, 2011
Castle Pines, CO – Milestone Communications, Inc., a leading brokerage firm serving the cable telecommunications industry, served as advisor to Community Antenna Service, Inc. in the sale of its cable television system serving 286 EBU’s in the Town of Tunnelton and portions of Preston County in West Virginia to Atlantic Broadband Finance LLC. Michael W. Drake of Milestone Communications represented Community Antenna Service, Inc. in the transaction.
Press Release
November 30, 2011
Castle Pines, CO – Milestone Communications, Inc., a leading brokerage firm serving the cable telecommunications industry, served as advisor to New Day Broadband Group LLC in their purchase from Baja Broadband Operating Company, LLC of its cable television systems serving 348 EBU’s and 3,384 homes passed in the communities of Logandale, Nevada and Logan and Clayton, New Mexico. Michael W. Drake of Milestone Communications represented New Day Broadband Group LLC in the transaction.
Press Release
September 30, 2011
Castle Pines, CO – Milestone Communications, Inc., a leading brokerage firm serving the cable telecommunications industry, served as advisor to Milestone Communications, LP in the sale of its cable television systems serving 264 EBU’s in portions of Pocahontas County including the communities of Durbin and Greenbank in West Virginia to Spruce Knob Seneca Rocks Telephone, Inc. Michael W. Drake of Milestone Communications represented Milestone Communications, LP in the transaction.
Press Release
April 1 , 2011
Castle Rock, CO – Milestone Communications, Inc., a leading brokerage firm serving the cable telecommunications industry, served as advisor to S Bryer Cable TV Corporation, Inc. in the sale of its cable television system serving 769 RGU’s in portions of Ashtabula and Trumbull counties in Ohio to Armstrong Utilities, Inc.. Michael W. Drake of Milestone Communications represented S Bryer Cable TV Corporation, Inc. in the transaction.
Press Release
February 1 , 2011
Castle Rock, CO – Milestone Communications, Inc., a leading brokerage firm serving the cable telecommunications industry, has been engaged by Caribbean Cable Communications Holdings, Ltd. (CCCH) to provide certain consulting services. CCCH owns and operates cable television systems serving Anguilla, Nevis and Montserrat in the eastern Caribbean. Michael W. Drake of Milestone Communications is providing the services to CCCH.
Milestone Communications Inc. Activities 2010
Press Release
March 31, 2010
Castle Rock, CO – Milestone Communications, Inc., a leading brokerage firm serving the cable telecommunications industry, served as advisor to Atlantic Broadband Finance LLC in their purchase from Saltillo TV Cable Corporation of its cable television system serving 137 EBU’s serving the community of Saltillo, Pennsylvania. Michael W. Drake of Milestone Communications represented Atlantic Broadband Finance LLC in the transaction.
Bulgaria Top Cable Providers Merge into Blizoo
Bulgaria's top cable providers Eurocom and CableTel, which merged earlier in the year after the acquisition by Swedish investment fund EQT V, have been rebranded as Blizoo.
Sweden-based private equity firm EQT acquired two of Bulgaria's major cable TV and Internet operators in a EUR 210 M deal at the end of October last year and merged them to form the country's biggest cable operator.
Under the deals EQT through its EQT V fund acquired 100% of Eurocom from US private equity firm Warburg Pincus and 70% of privately-owned CableTel.
CableTel's other shareholder Ron Finley remained minority shareholder by rolling over his 30% shareholding in CableTel into the merged company and investing further equity.
“Blizoo has the ambition to turn into Bulgaria's leading digital television operator and the biggest broadband Internet provider,” said Istvan Polony, chief executive of Blizoo.
EQT has a strong track record of fostering growth and value creation in the more than 70 companies that it has invested in over the last 14 years.
EQT has previously developed Swedish cable TV operators StjärnTV and Com Hem into leading local providers of digital TV, broadband and telephony - so called triple play.
Currently, EQT owns a leading German cable TV operator Kabel BW which has recorded significant growth and successfully developed the triple play concept in Germany.
Milestone Communications Inc. Activities 2009
Press Release
December 31, 2009
Castle Rock, CO – Milestone Communications, Inc., a leading brokerage firm serving the cable telecommunications industry, served as advisor to M-Tek Systems, Inc. in the sale of its cable television systems serving approximately 800 EBU’s in the communities of Clements, Wabasso, Echo, Belview, Woodlake, Comfrey, Lamberton, Lucan, Nicollet, Revere and Walnut Grove, Minnesota to Hanson Communications. Michael W. Drake of Milestone Communications represented M-Tek Systems, Inc. in the transaction.
Press Release
December 17, 2009
Castle Rock, CO – Milestone Communications, Inc., a leading brokerage firm serving the cable telecommunications industry, served as advisor to Atlantic Broadband Finance LLC in their purchase from Alleghenyintel, LLC of 11,225 dial up or dsl internet subscribers located in western Pennsylvania and surrounding areas. Michael W. Drake of Milestone Communications represented Atlantic Broadband Finance LLC in the transaction.
Press Release
July 31, 2009
Castle Rock, CO – Milestone Communications, Inc., a leading brokerage firm serving the cable telecommunications industry served as advisor to Project Services Inc, of Minnesota in the sale of its cable television systems serving approximately 525 EBU’s in the communities of Milan, Watson, Raymond, Hanley Falls and Lake Lillian, Minnesota to Farmers Mutual Telephone Company. Michael W. Drake of Milestone Communications represented Project Services, Inc. in the transaction.
Press Release
June 3, 2009
Castle Rock, CO – Milestone Communications, Inc. served as advisor to Quincy Community TV Association, Inc. in the sale of its cable television system serving approximately 800 EBU’s in and around Quincy, California to New Day Broadband of Quincy, LLC. Michael W. Drake of Milestone Communications represented Quincy Community TV Association in the transaction.
Press Release
May 29, 2009
Milestone Communications, Inc.served as advisor to Retel TV Cable Co. in the sale of its cable television systems serving approximately 1600 EBU’s in and around the communities of Canton, Ralston and Cogan Station, Pennsylvania to Zito Canton, LLC. Michael W. Drake of Milestone Communications represented Retel TV Cable Co. in the transaction.
Volia Cable and SigmaBleyzer merge to form pre-eminent Ukrainian cable provider
With operations in over 15 of Ukraine`s largest cities
Volia Cable (Aquorn Limited) and SigmaBleyzer`s regional cable operations (Oisiw Limited) are merging to form Ukraine`s pre-eminent cable provider with operations in over 15 of Ukraine`s largest cities. As a result of the merger, the combined business, to be named Volia Limited, will provide television service as well as high-speed Internet access to over 2.5 million Ukrainian households, according to Business Wire.
In a separate transaction, Providence Equity Partners, the world`s leading media and communications private equity firm, is making an additional investment in Volia bringing its total investment in the combined entity to over US$300 million. The transaction has been approved by the Antimonopoly Committee of Ukraine.
"We are very pleased to extend our partnership with Providence, a leading private equity investor and one of the largest and most experienced owners of media and communications companies globally," said Michael Bleyzer, President and CEO of SigmaBleyzer. "Merging our two cable businesses makes a lot of strategic sense and will allow us to provide best in class service from a unified operating platform to our subscribers. We see Providence`s increased investment in Ukrainian cable also as a vote of confidence in the Ukrainian economy."
"The combination of Volia Cable and SigmaBleyzer`s regional cable operations creates a cable company uniquely positioned to meet the rapidly expanding demand in Ukraine for the most advanced television and broadband services," said Jonathan M. Nelson, Providence Chief Executive Officer. "We are pleased to expand our commitment to Volia and look forward to continuing to work with Michael and Sergey and their teams to build value at Volia over the long-term."
Sergey Boyko, President of Volia Cable, will be leading the combined business and said: "I see tremendous potential in the combined operations. We now have the platform and scale to build a unified cable brand across Ukraine and bring to the regional cities the same level and quality of service that our subscribers in Kyiv have come to rely upon."
Goldman Sachs International acted as financial advisor to Oisiw Limited.
About Providence Equity Partners Inc.
Providence Equity Partners is the leading global private equity firm specializing in equity investments in media, entertainment, communications and information companies around the world. The principals of Providence manage funds with approximately $22 billion in equity commitments and have invested in more than 100 companies operating in over 20 countries since the firm`s inception in 1989. Significant investments include Bell Canada, Bresnan Broadband Holdings, Casema, Com Hem, Digiturk, Education Management Corporation, eircom, FreedomCommunications, Hulu, Idea Cellular, Kabel Deutschland, Metro-Goldwyn-Mayer, NexTag, Ono, Open Solutions, PanAmSat, ProSiebenSat.1, Recoletos, TDC, Univision, VoiceStream Wireless, Warner Music Group, Western Wireless and Yankees Entertainment and Sports Network. Providence is headquartered in Providence, RI (USA) and has offices in New York, Los Angeles, London, Hong Kong and New Delhi.
About Volia Limited
Volia Limited is the number one cable TV and Broadband Internet provider in Ukraine. As a result of the merger, the combined entity will have about 2.5 million homes passed and 1.8 million RGUs. Volia Limited provides services such as analog cable TV, digital cable TV, high-speed cable Internet access, VoIP and data services. New services, such as VoD and PPV, are under development and will be implemented in the future.
Volia Limited was created through the consolidation of a number of companies acquired by SigmaBleyzer over the past few years. Since acquisition, Volia has worked on integrating and upgrading the activities of the original cable operators.
About SigmaBleyzer
Operating in the region for over a decade, SigmaBleyzer is one of the largest and most experienced private equity investors in Eastern Europe. With the strength of the company`s local infrastructure, western-style management and knowledge of local markets, SigmaBleyzer has created one of the best investment management companies in the region. SigmaBleyzer manages funds and special purpose investment vehicles with approximately $1 billion in commitments and has made investments in over 100 companies in Ukraine since 1994.
As a manager of a family of private equity funds currently investing in Ukraine, Romania, Bulgaria and Kazakhstan, SigmaBleyzer utilizes a hybrid investment approach developed specifically for emerging markets and focused on simultaneous value creation at the micro or enterprise level and at the macro level. Because of this unique approach and strong on-the-ground presence in a region where many of its investors could not have invested directly, SigmaBleyzer brings one of the most attractive pipelines of investment opportunities found anywhere to its client base.
With offices in Kyiv and Kharkiv (Ukraine); Sofia (Bulgaria), Bucharest (Romania), Astana (Kazakhstan), and a back office in Houston, Texas, SigmaBleyzer has the infrastructure in its countries of operation to successfully manage portfolio companies to help them reach their full potential, while creating value for the investors, shareholders, employees and other stakeholders.