KKR et al. support Skype buy-back

Private equity groups KKR, Warburg Pincus, Providence, and Elevation Partners are reportedly backing Skype founders Niklas Zennstrom and Jannus Friis in their bid to re-acquire the global telecommunications company from eBay.

eBay is thought to be willing to sell the business for a price tag of around £1.14bn, but the two sides are said to be far apart on the issue. The private equity groups are said to be contributing around $1bn to the deal, with the vendor also reported to be providing a loan.

eBay purchased Skype for $2.6bn in 2005 from its venture backers Bessemer Venture Partners, DFJ, Draper Investment, Index Ventures and Mangrove, in a deal that earned the exiting investors returns multiples of between 40-300x. In 2007, it took a $1.4bn writedown on the asset. Skype allows users to phone friends and relatives across the world for free, has more than 405 million registered users and achieved revenues of $145m in the Q4 2008.

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