Astorg sells M7 Group to trade in €1bn deal

The transaction was valued slightly above €1bn, according to a statement by Canal+. Both Astorg's substantial majority stake and the management's minority have been sold. 

Astorg appointed Morgan Stanley to launch the sale of the asset, based on €110m EBITDA in March 2018, Unquote's sister publication Mergermarket reported at the time. However, divergent price expectations between the seller and the potential buyers brought Astorg to postpone the selling process.

Charles-Hubert Le Baron, associate director at Astorg, tells Unquote that "during the sale process in 2018, we felt that the level of valuation proposed by potential acquirers was not fully reflecting the various upsides for M7, in particular some strategic acquisitions. As a result, the 2018 sale process was halted and we concentrated our effort on strategic projects, in particular realising the acquisition of Liberty Global's TV operations in eastern Europe."

Indeed, the business bolted on Liberty Global's TV operations, known as UPC Direct, in Q1 2019. "After that, we were approached in a proactive way by the Canal+ team and, seeing that the M7 Group's management was also prepared and convinced that Canal+ was a credible acquirer, we decided to consider a sale earlier than expected, and to enter into bilateral discussions,” says Le Baron.

Following this transaction, M7 will get access to the content creation and channel publishing capabilities of Canal+. The operational model of M7 will remain unchanged and it will continue to be managed from its Luxembourg headquarters.

Previous funding
Airbridge Investments first entered the business when it acquired stakes in Canal Digitaal Satelliet and TV Vlaanderen, two companies that later formed part of the M7 group. Providence Equity Partners then acquired a majority stake in the businesses in 2007, while Airbridge retained a minority stake alongside company management.

After Providence and Airbridge were reported in 2013 to be seeking a dividend of approximately €300m from a recapitalisation, Astorg Partners acquired a majority stake in the business in 2014, resulting in a partial exit for Providence. At this stage, both Providence and Airbridge retained a significant minority stake in M7. The transaction saw an equity debt ratio of around 45:55, Unquote understands. 

Three years later, M7 raised €550m in leveraged loans to refinance existing debt and buy out the minority shareholders in the company for €175m. Following the refinancing, Astorg owned 95% of the company with M7's management owning the remaining 5%.

Company
Founded as a group in 2009, Luxembourg-headquartered M7 is a provider of satellite and internet services. The company claims to serve around three million viewers via its pay TV platforms, including CanalDigitaal and Online.nl in the Netherlands; TV Vlaanderen in Flanders; and TéléSAT in French-speaking Belgium; HD Austria in Austria; Skylink for the Czech and Slovak markets; and M7 Deutschland in Germany. It employs around 300 people. 

The business generates a turnover of more than €400m, according to a statement by Canal+.   

People
Astorg – Charles-Hubert le Baron (associate director).
M7 Group – Hans Troelstra (CEO); Marc Antoine d'Halluin (chairman).

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