SigmaBleyzer lands $200m exit from Ukrainian cable company

Providence Equity Partners has made the largest Western private equity investment in the Ukraine, buying a substantial stake in Volia Cable from SigmaBleyzer.

Eastern European growth capital firm SigmaBleyzer, and other shareholders, have sold a significant stake in Ukrainian telecoms company Volia Cable to Providence Equity Partners for more than $200 million (€136.4 million), according to a spokesman.

The deal is the largest Western private equity investment in the Ukraine.

SigmaBleyzer will be retaining a significant stake for its third fund which raised $60 million in 1997.

SigmaBleyzer’s spokesman said: “Had there not been a reason to do the deal we wouldn’t have. The level of return was consistent with the amount of risk of investing in an emerging market.”

SigmaBleyzer formed Volia Cable through various acquisitions in 1999 and 2000, the spokesman said.

The substantial exit caps off a resurgent year for SigmaBleyzer, which raised €250 million for its fourth fund in February 2007, 25 percent above its target. The fund took on a pan-regional brief in contrast to the fund’s predecessors which had all been Ukraine focussed.

The spokesman said the fund had waited ten years before fundraising in part because of the Russia crisis in 1998. “Investors were edgy about putting money in Eastern Europe. Now we’re one of the few firms that began back then and we’re still around. We’ve been operating in Ukraine since 1994.”

As it expands beyond Ukraine, the firm has recently opened an office in Astana in Kazakhstan. It also opened offices in Bucharest in Romania and Sofia in Bulgaria more than two years ago before the fundraising for its fourth fund was launched in 2005, the spokesman said

Jonathan M. Nelson, Providence’s chief executive said in a statement the investment was the firm’s seventh in the sector in Europe and its second in Eastern Europe. The region is experiencing increasing demand for sophisticated television and broadband services, he said.

Goldman Sachs and UBS acted as financial advisors to SigmaBleyzer. Lazard acted as financial advisors to Providence.