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Mid Europa sells Invitel to Chinese-backed fund

16 Jan 2017

Private equity group Mid Europa Partners announced on its website on Friday that it has agreed to sell its controlling stake in Hungarian telco Invitel to CEE Equity Partners, the investment advisor to the China CEE Investment Co-operation Fund. The transaction is subject to customary closing conditions, including local competition authority clearance, and is expected to complete in the first quarter of 2017. A separate press release from Invitel’s Netherlands-registered, London-headquartered holding company Matel stated that the proposed sale values Invitel at an enterprise value of EUR202 million (USD215 million), or 4.5 times its 2015 EBITDA.

Invitel CEO David Blunck commented on the deal: ‘Under Mid Europa’s leadership we have strengthened Invitel’s position in the Hungarian market and we are grateful for their support. We look forward to further developing the business under the ownership of CEE Equity.’ The buyer represents a USD435 million private equity fund, established by China Exim Bank in partnership with central/eastern European institutional investors, with current investments in countries including Poland, the Czech Republic and Bulgaria.

TeleGeography’s GlobalComms Database (GCD) notes that Mid Europa’s decision to sell Invitel was consistent with a widespread telecoms sector divestment strategy: Mid Europa – which is focused on central/south-east Europe – sold its only other remaining telco subsidiaries Bite Latvia/Lithuania in Q1 2016.

GCD adds that Invitel is Hungary’s second-largest fixed voice provider and fourth-largest fixed broadband operator by subscribers, delivering business and residential services over a range of access platforms including copper PSTN, cable, fibre and fixed-wireless. It is the incumbent PSTN provider in 14 of Hungary’s 54 historical fixed line concession areas, covering around 1.1 million households, while its 9,000km fibre-optic transmission backbone network gives it nationwide reach, connecting all of the country’s major urban centres, with eleven border crossing points. Invitel has been controlled by Mid Europa since 2009, and is currently 99.99% owned by Matel (full name Magyar Telecom BV – not to be confused with Hungarian incumbent Magyar Telekom), itself 51% owned by Mid Europa’s 100%-held unit Hungarian Telecom BV (via other holding companies) and 49% by Cayman Islands-incorporated, UK-registered Matel Holdings Ltd which is owned by bondholders.

Hungary, Invitel (part of DIGI)

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