Novum-backed MMC Studios up for sale amid content production boom

Stephens is advising on the process, three of the sources said and a sector banker familiar said, with two sources noting that the auction has advanced to the second round. The process is codenamed “Project Action”, two of the sources said.

MMC is being marketed off of around EUR 10m EBITDA for 2021, the sources said. Its revenues are in the range of EUR 55m-EUR 57m, according to two sources.

The Cologne-based company is attracting interest from sponsors and strategic bidders, one of the sources said. Pan-European private equity firm Ardian is among the bidders for the company, according to another source.

Novum, MMC, Stephens and Ardian declined to comment.

MMC has grown “nicely” since Novum acquired it in 2019 from sponsors DUBAG Group and Unigestion, one of the sources said. The company posted EUR 4m EBITDA at the time of that deal, according to Mergermarket data. It generated EUR 52m revenue and had 121 employees in 2020, according to Novum’s website.

The business presents a “strong” growth case given the ongoing boom for content production for films, television and streaming services, and its EBITDA is on track to reach EUR 15m in 2022, one of the sources said.

“There is a lot of spending on production, and content is king is my understanding,” another source added.

Founded in 1991, MMC runs one of Europe’s largest film and TV studio spaces and is a leading full-service provider for TV shows, series and feature films, according to Novum’s website. Its premises, known as the "Coloneum", also host corporate events, trade shows, e-sports and gaming events.

Roughly 80% of MMC’s revenue comes from producing “shiny floor” entertainment shows such as The Masked Singer or Germany’s Got Talent, one the sources said. The company has been branching out into developing its own productions, which it then sells onto distributors or streaming platforms, the same source added, noting that MMC is the owner of IP rights in this case.

MMC’s market is also characterized by “massive” entry barriers, and the company is the largest privately-held production firm of its kind in Germany comprising 22 soundstages covering 150,000 square meters, the same source added.

Larger players in its space such as Bavaria Studios and Studio Berlin are backed by the Germany’s public broadcasters, one of the sources said. Studio Babelsberg, a German film studio backed by sponsor TPG, specializes in feature films and does not compete directly with MMC, the same source added.

Other private equity-backed competitors include LEONINE Holding, a German film studio backed by KKR and Mediawan, and Euro Media Group (EMG), a French audiovisual technical services provider backed by PAI Partners.

EMG was acquired by PAI Partners in 2014 for an estimated deal value of EUR 170m.

LEONINE Holding, formerly known as Tele München, has completed a number of add-ons under KKR’s stewardship, including of UK-based movies producer Drama Republic in 2021 and of Munich-based TV production company SEO Entertainment in 2020.

Still, EMG only has a small footprint in Germany, and LEONINE focuses more on developing their own content and IP rights and could be a customer of MMC for production services, one of the sources said.

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