Providence buys Starman from East Capital for €210m

The transaction sees Providence buy East Capital's entire 63% stake in the company, two years after the Swedish investor first invested in the Estonia-headquartered group. Providence will pay East Capital €81m of cash in the deal, with the possibility of a further €5m in 2017 triggered by an earn-out clause.

Providence will offer to buy out Starman's minority shareholders on the same terms as East Capital, though they will be forced to sell their shares under drag-along provisions if they do not exercise their pre-emptive sale rights.

Starman is the US GP's second Baltic acquisition in the first quarter of 2016, having bought Lithuania-based pan-Baltic mobile network operator Bite in an SBO from Mid Europa Partners in January. Providence had previously owned the company through former Danish parent TDC.

Providence managing director Karim Tabet said in a statement the buyout of Starman formed part of his firm's strategy of investing in infrastructure, media and communications services in the Baltic region.

For East Capital, the exit returned an annualised IRR of 24-27% and an equity gain of at least €35m, excluding the earn-out.

The deal is subject to regulatory approval and is expected to close in Q2 2016.

Company
Founded in 1992, Starman Group is a TV and broadband provider headquartered in Tallinn, Estonia.

The company operates in Estonia and Lithuania and employs a staff of 500. During East Capital's ownership, Starman bolted on Lithuanian competitor Cgates.

People
Providence Equity Partners – Karim Tabet (managing director).
Starman Group – Aivo Adamson (CEO).
East Capital Explorer – Kestutis Sasnauskas (head of private equity and real estate).

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