China CEE Fund to acquire $214m Hungarian telco business

The China CEE Investment Co-operation Fund has agreed to acquire Invitel Group from buyout specialist Mid Europa Partners and investment company Matel Holdings. 

Invitel ranks among the largest fixed-line telecoms and broadband services providers in Hungary, serving both residential and corporate customers across the territory. 

The proposed transaction values the company at €202 million, or 4.5x its 2015 EBITDA, and is expected to be complete in the second half of February. The deal, approved unanimously by Invitel’s board, is subject to approval by shareholders and the Hungarian competition authority. 

Mid Europa, which holds a 51 percent stake in the group, has expressed its support of the transaction, while the company’s 49 percent shareholder, Matel Holdings, is soliciting approval via a consent request. 

It’s not the first time Mid Europa exits an asset to the China CEE fund: in January 2016, the buyout firm announced its divestment of a stake in the largest Czech-based independent solar power operator Energy 21 to the vehicle for undisclosed sum.   

The fund was established by China’s Export-Import Bank in 2012 in partnership with other institutional investors from the Central and Eastern European region to invest in CEE countries. It had a total commitment of $435 million upon launch, according to the fund’s website. It said last November that the second phase of the fund, armed with $1 billion in fresh commitments, would be established and become operational in 2017. 

Another similar yet much bigger vehicle was set up by the Chinese government last November, according to an announcement by the Industrial and Commercial Bank of China, lead investor of the €10 billion fund. The vehicle, managed by ICBC subsidiary Sino-CEEF Holding Company, aims to mobilise up to €50 billion in project financing.