SBB, Telemach sold to KKR

16 Oct 2013

Private equity firm Kohlberg Kravis Roberts & Co (KKR) yesterday signed a definitive agreement under which funds advised or controlled by KKR will acquire south-eastern European pay-TV and broadband group SBB/Telemach (also known as United Group) from Mid Europa Partners (MEP) for an undisclosed price. The press release says that the existing executive management team led by founder and chairman Dragan Solak will remain in place and retain a ‘substantial’ stake in SBB/Telemach. The transaction is subject to customary approvals and is expected to close around the end of this year.

TeleGeography says that United Group (with its registered office in Luxembourg) consists of three multi-service cablecos – Serbia Broadband (SBB), Telemach Slovenia and Telemach Bosnia & Herzegovina – plus the satellite TV platform ‘Total TV’ operating across six countries, Serbia, Slovenia, Croatia, Bosnia & Herzegovina, Montenegro and Macedonia (FYROM), while the group also offers data and voice services to small, medium and large companies across the region. United Group has 1.7 million revenue generating units (RGUs), including cable and satellite TV, broadband internet, fixed telephony and mobile resale subscribers, while 90% of its revenues derive from Serbia and Slovenia. MEP appointed Credit Suisse to lead a sale earlier this year, seeking a price close to EUR950 million (USD1.26 billion), although a more realistic valuation was thought to be around EUR850 million. Minority stakeholder the European Bank for Reconstruction and Development (EBRD) was not mentioned in the sale agreement press release.

Henrik Kraft, head of KKR’s telecoms and technology team in Europe said of the deal: ‘We look forward to partnering with Dragan Solak and his team. They have built a strong and sophisticated TV and communications platform and we are excited to support the company in its further growth.’ Mr Solak said that KKR’s telecom sector expertise, experience and global resources ‘will be a great asset for our firm in this next stage of development.’ KKR’s co-founder Henry Kravis added: ‘This is our first direct investment in south-eastern Europe. It adds to our investments in more than 40 European companies across twelve countries and it is a sign of our confidence in the prospects of SBB/Telemach … and in the region.’

Kohlberg Kravis Roberts & Co is publicly traded on the New York Stock Exchange; KKR includes subsidiaries and managed investment funds/accounts plus affiliated investment vehicles representing USD83.5 billion in assets under management worldwide as of 30 June 2013.

Bosnia-Herzegovina, Croatia, Montenegro, North Macedonia, Serbia, Slovenia, Serbia Broadband (SBB), Telemach (Bosnia-Herzegovina), Telemach (Slovenia), United Group