Over the last two years, Eastern Europe remained an active pay-TV market from an M&A perspective, with high fragmentation in the cable sector leading to ongoing consolidation, according to a new report from SNL Kagan.
Another supporting factor is high pay-TV penetration, which limits greenfield growth opportunities in cable, while intense competition among multiple DTH operators increases the need for competitive offers.
In 2015, the hottest M&A market was Bulgaria, where two leading pay-TV operators changed ownership. First, Telekom Austria Group acquired largest Bulgarian cableco blizoo Bulgaria from Sweden-based investment fund EQT, gaining 373,000 subscribers.
Later that year, leading Bulgarian telecom company Vivacom was sold at auction for €330 million. As the buyer agreed to take on €400 million of debt, the implied price of the company was €730 million, making it the region’s No. 1 pay-TV deal of 2015 in terms of value. Telekom Austria was also active in Slovenia and Croatia, where the telco acquired Amis, a broadband Internet and IPTV provider operating in both countries.
In the Baltics, East Capital Explorer AB has spent almost €80 million on recent acquisitions. The fund, a majority owner of largest Estonian cableco Starman A.S., increased its stake in the company from 51% to 62%, followed by Starman’s acquisition of its Lithuanian counterpart Cgates. As a result, the group currently boasts 525,530 revenue generating units in the Baltics.
Poland is home to over 500 cable companies, of which only six serve more than 100,000 subscribers, with market fragmentation pushing top cable operators like UPC Poland, Multimedia Polska and Vectra SA toward M&A activity. With almost 300 cable companies, Romania is a similarly fragmented cable market, with UPC Romania and Romania Cable Systems & Romania Data Systems (RCS&DCS) also buying smaller players.
