East Capital Explorer has agreed to sell its entire 63% stake in the pan-Baltic cable operator Starman Group to Providence Equity.
The transaction, which implies a total enterprise value of around €210 million, will see East Capital Explorer receive an upfront cash payment of approximately €81 million, with the potential of up to €5 million more, payable in 2017.
East capital Explorer acquired a majority stake in Starman, Estonia’s leading cable operator, in 2013, since when the latter’s revenues have grown by an average of 11% a year. In February 2015, it then acquired the Lithuanian cable operator Cgates, thereby creating the first pan-Baltic cable and broadband provider. Its total investment in the two companies amounted to €46 million.
Commenting on the latest deal, Mia Jurke, CEO of East Capital Explorer, said: “This transaction will crystallize significant value for our shareholders, and prove our past three years’ strategic focus on investments in private equity and real estate in the Baltic countries. We welcome the financial flexibility that this transaction will give us. We believe that our strategic investment focus and a continued use of available tools such as buybacks, dividends and share redemptions, can altogether increase shareholder value.”
Kestutis Sasnauskas, head of private equity and real estate at East Capital, added: “I am pleased to announce this, which will be one of the largest private equity transactions in the Baltics to date. We have strengthened investments in technology, product development and market consolidation, and worked closely together with the management team. This has enabled Starman to outgrow its competitors and transform from a national challenger into a regional leader. We are confident that Providence will enable Starman to continue to develop successfully in this exciting and fast evolving market.”
Aivo Adamson, CEO of Starman Group, said: “Starman has in recent years intensively focused on growth and expansion in our Baltic home market, supported by East Capital Explorer. We are committed to offering our clients innovative and superior telecom and entertainment solutions. We are confident that with the addition of a strong financial investor, with over 25 years of experience of telecom investments, as our new majority owner, we can continue on the path of innovation and growth in the Baltic region.”
Karim Tabet, MD at Providence, said: “The acquisition of Starman Group would represent Providence’s continued commitment to investing in infrastructure to support the delivery of high quality media and communication services in the Baltic region.”
Robert Sudo, MD at Providence, added: “We look forward to supporting the company’s strategy to improve customer experience and provide access to best-in-class services and content.”
