Mid Europa exits SBB/Telemach to KKR for €1bn

The deal sees Mid Europa generating close to a 3x blended return on its original investment from two funds via the exit. The deal constitutes one of the largest private equity exits in the CEE region.

The deal represents New York-based KKR's first investment in Eastern Europe. Liberty Global, Providence and Cinven also bid for the business, according to the Financial Times. Mobile phone operator Telekom Austria reportedly withdrew from the bidding process.

Mid Europa acquired Serbian pay TV and broadband internet provider SBB from Bedminster Capital Management in June 2007. The transaction saw Bedminster reinvest alongside Mid Europa to acquire a minority stake through its Southeast Europe Equity Fund II. The transaction value was said to be between €170-200m. Unicredit Markets and Investment Banking acted as sole underwriter and mandated lead arranger of the €81m financing package. 

Mid Europa's plan was to grow the company through add-on acquisitions. In December 2012, Mid Europa merged Serbia Broadband (SBB) with Slovenian telecoms business Telemach Group, refinancing the group with €333m of senior debt.

Since Mid Europa's original investment, which came from its Emerging Europe Convergence Fund II, the company has acquired an additional 18 businesses, which together with SBB comprise the group today.

SBB/Telemach has expanded its operations to include six countries in the CEE region. During Mid Europa's holding period, its EBITDA has grown at an annual rate of 37%.

Company
SBB was founded in Belgrade in 2002 and merged with Slovenian company Telemach in 2012. SBB/Telemach Group is a provider of home entertainment and communication services in the CEE region.

Today the group offers cable and satellite TV, internet and fixed and mobile telephone services to 1.5 million subscribers in six countries, including Serbia, Slovenia, Bosnia, Croatia, Montenegro and Macedonia.

People
Robert Knorr is a senior partner of Mid Europa. The Mid Europa execution team included associate director Andrej Babache, as well as Stefan Tzvetkov, Viktoria Habanova, Matthias Dukat and Krzysztof Jedrzejek. Dragan Solak is founder and chairman of SBB.

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