Modern Times Group (MTG) has agreed to sell its 50% stake in FTV Prima Holding to Denemo Media in a cash transaction that values 100% of the company at SEK2,255 million (€237.4 million).
The deal, which is subject to local regulatory approval, is expected to close in the first quarter of this year.
MTG has fully consolidated FTV Prima Holding, which contributed SEK1,226 million of sales and SEK201 million of operating income (EBIT) for the 12 months to the end of Q3 2016. It is now considering using the proceeds from the sale to increase its ownership in the global online games developer InnoGames from 21% to 51%, based on the same enterprise value of €260 million for 100% of the company that MTG paid for its initial investment at the end of 2016.
MTG acquired FTV Prima Holding, one of the top two commercial broadcasters in the Czech Republic, for €87 million in cash in 2005. The total cash return on the investment, including dividends received and the sale price, is expected be approximately SEK1.6 billion.
Denemo Media is a Czech joint venture between Denemo Invest (75%) and GES Media Asset (25%). Denemo Invest is a subsidiary of Alphaduct, which is owned by the Czech businessman Vladimir Komar, while GES Media Assetis part of GES Group, which already owns 50% of FTV Prima Holding.
Commenting on the development, Jørgen Madsen Lindemann, MTG president and CEO, said: “Prima Group is a great business with a very talented team delivering popular news and entertainment programming. Over the past 11 years, our local Czech partner and we have transformed the Czech media landscape by launching a wide variety of channels and services, and establishing Prima as the go-to brand for information and entertainment. We wish the team continued success with our local partner and the new investor.
“We are considering investing part of the proceeds in moving up to a majority position in InnoGames. This is perfectly in line with our strategy to invest in relevant, complementary and scalable digital content and communities, and online gaming is the third vertical in our MTGx digital video entertainment portfolio. This is another key step in our ongoing transformation and we are constantly reviewing opportunities to expand our digital operations and footprint further.”