East Capital Explorer has agreed to buy a 51% stake in the leading Estonian cable operator Starman from a consortium led by Bankroft Private Equity for approximately €24 million.
Under the terms of the deal, which will see the remaining 49% stake held by Starman’s founders Peeter Kern and Indrek Kuivallik, the company is valued at €107 million.
Kern and Kuivallik will increase their current equity stakes in Starman by investing an additional €5 million on the same terms as East Capital Explorer.
SEB and Swedbank are financing part of the deal, which is subject to approval from the Estonian competition authorities and is expected to be completed in the second quarter, with an acquisition loan.
Starman currently has around 130,000 cable TV and 60,000 broadband subscribers.
It operates a 100% digital network covering all major cities in Estonia and its revenues in 2012 amounted to €28 million, with EBITDA of €13 million.
East Capital Explorer is a Swedish company focused on investments in Eastern Europe.
Speaking to the local press following the announcement of the deal, Peeter Keern revealed that there were initially around 30 bidders for the stake in Starman, with the number eventually reduced to a shortlist of 4-5.
Broadband TV News believes the deal to trigger off further changes in Estonia’s cable market, with STV, the second largest operator, now a possible take-over target for East Capital Explorer and other parties.
