EMP Europe, the private equity firm focused on Central and Eastern Europe, is selling its entire unspecified interest in Slovenian broadband provider Telemach to UnitedGlobalCom Inc (UGC). UGC is paying EMP Europe and several unnamed Slovenian shareholders €71 million ($96 million) in cash for a 100 percent stake. The deal is subject to approval by the Slovenian competition authorities and is expected to close in the first quarter of 2005.
Telemach is the largest broadband communications provider in Slovenia with over 100,000 cable TV subscribers and 10,000 broadband internet customers. Founded in 1999, the firm has achieved revenue growth of 25 percent per annum over the last three years and over that time has upgraded two-thirds of its network to support broadband internet and digital television services.
“This acquisition represents a unique opportunity to take a leadership position in a new Central and Eastern European market for UGC,” said Mike Fries, president and CEO of UGC. “Slovenia, which recently joined the EU, has the highest GDP per capita in the region and is adjacent to Austria and Hungary where we currently have large operations.”
“Since EMP became the majority shareholder of Telemach in 2000, Telemach developed from a small cable operator with less than 20,000 subscribers, into Slovenia’s undisputed market leader with more than 100,000 video subscribers and operating margins in excess of 45 percent,” said Thierry Baudon, CEO of EMP Europe.
UGC is an international provider of video, voice and broadband internet services with operations in 14 countries, 11 in Europe. The firm has 9.1 million video subscribers, 761,000 telephone subscribers and 1.3 million broadband internet subscribers.
EMP Europe has invested around $500 million in Central and Eastern Europe during the last five years and focuses on the cable TV, fixed and mobile telephony and other infrastructure-related industries. In November, it sold its 39 percent stake in Polish broadband operator Aster City Cable to US buyout house Hicks, Muse, Tate & Furst, which was an existing investor in the business.
EMP Europe was advised on the Telemach transaction by Rothschild.