MTG acquires 75% of pay-TV operator Trace

Pascale Paoli-Lebailly | 25-02-2014

Scandinavia's Modern Times Group (MTG) has signed an agreement to acquire 75% of Trace Partners SAS (Trace), the French-based youth media brand and global pay-TV channel operator, whose portfolio includes Trace Sports Stars, Trace and music TV channels Trace Urban, Trace Tropical and Trace Africa.

Trace has distribution agreements with third party network operators in 160 countries worldwide, including all 55 countries in Africa. The four channels are localised in 16 different feeds and are available in up to 11 languages.

The stake is being acquired from Citizen Capital, Entrepreneur Venture, NextStage, and company management, for a cash consideration that values 100% of the company at an enterprise value of €40 million.

Trace management will retain the remaining 25% of the company.

Olivier Laouchez, Trace co-founder, will continue as chairman and CEO of Trace, and the other members of the senior management team will also continue in their roles.

Trace also runs a number of complementary branded entertainment businesses, including the annual Trace Music Awards, the Trace Stars' mobile song competition, which was recently launched in Africa; and Trace FM, a leading FM radio music station in the French Caribbean.

Trace's recently launched mobile and digital assets are also developing fast with online entertainment portal, smart personalised video music service My Trace and Trace Mobile.

The company has generated 23% compound annual net sales growth over the five years to the end of 2013 and reported preliminary net sales of € 19.3 million for the full year 2013. Half of its revenues are generated in Africa and other emerging markets.

Trace had 37 million paying subscribers as at the end of December 2013, up from 27 million at the end of 2012.

The transaction is subject to regulatory approval by the French media authorities and MTG will consolidate Trace's results in the Group's accounts with effect from the closing of the transaction.

"Trace fits perfectly with what we are doing both in Africa and, more broadly, with both our linear and digital operations, as well as our content production houses. This deal is another key milestone in our international expansion and provides us with footholds from which we can expand even more in Europe, South America, Asia and francophone countries around the world," commented Joseph Hundah, executive vice president of MTG's African operations.