2020 is already proving to be an eventful year for United Group, one of the leading providers of media and telecom services in South East Europe.
In an M&A market that has virtually ground to a halt since the start of the coronavirus pandemic, the company announced a few days ago that it has entered into an agreement to buy an initial 36% stake in Forthnet, one of the leading providers of pay-TV services in Greece. The transaction is the third major acquisition deal signed by United Group since it was acquired by BC Partners in March 2019, the others being Croatia’s Tele2 and Bulgaria’s Vivacom. The former, worth €220 million, closed in early March, while the latter, valuing the incumbent telco at €1.2 billion, received the European Commission’s approval in April despite being challenged in court by Empreno Ventures.
The recent acquisitions build on United Group’s already strong presence in South East Europe, and in particular the Balkan region. Its other assets include Serbia Broadband (SBB), the Telemach-branded cable operations in Slovenia, Bosnia & Herzegovina and Montenegro, regional DTH platform Total TV and international OTT service Net TV plus. Meanwhile, its subsidiary United Media operates a growing portfolio of thematic channels across the region.
The investment in Forthnet is interesting, given the challenges currently faced by the company. Its most recent results show that it ended last year with 4.3% fewer pay-TV subscribers than in 2018 in its home market Greece and Cyprus, while its total revenues were 7.9% lower. Despite claiming its performance demonstrated resilience in challenging market conditions, Forthnet has been looking for an investor for some time and United Group may well turn out to be a good choice.
Meanwhile for United Group, further acquisitions are almost certainly on the horizon.
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