Liberty Global to sell East Euro DTH business to M7 for €180MN
Details
Joseph O'Halloran
| 21 December 2018

Global media giant Liberty Global has reached an agreement to sell its DTH satellite TV operations currently serving four Eastern European markets to M7 Group.

Currently the Liberty Global DTH business serves customers in Hungary under the brand UPC Direct, in the Czech Republic and Slovakia under the brand freeSAT, and in Romania under the brand FocusSat. The deal has a total enterprise value of approximately €180 million on a US GAAP basis, subject to customary debt and working capital adjustments at completion. Closing of the transaction is subject to regulatory approval, which is expected in the first half of 2019.

Luxembourg-based pay-TV operator M7 Group currently offers language-specific packages to over three million subscribers in six countries: Netherlands, Belgium, Germany, Austria, Czech Republic and Slovakia. It believes that its acquisition will enable to gain further scale and increase its top line by circa 30% post transaction.

Commenting on the acquisition, M7 Group CEO Hans Troelstra said: “This is a very logical acquisition for us, allowing us to consolidate the satellite TV activities of Skylink in the Czech and Slovak markets, while further diversifying our European footprint into two new markets. In addition, we will be able to roll out our hybrid satellite and OTT TV platform in those two new markets. In our existing markets the OTT platform is already used by about 15-20% of the base.”

Liberty says that the proceeds from the sale are expected to be used for general corporate purposes. In its most recent financial results for Q3 2018, robust performance by cableco Virgin Media in the UK and Ireland added a gloss to the general business in which subsidiaries in other territories witnessed challenges to the point of business contraction. Overall Q3 revenues amounted to $3 billion, up 1.9% year-on-year, while year-to-date revenues were $9.1 billion, an increase of 2.4% compared with the same time in fiscal year 2017.

Yet despite the revenue increases, Liberty Global saw year-to-date operating income fall 4.8% on annual basis to $592.9 million while Q3 operating income slipped back by 1.0% compared with Q3 2017 to $208.6 million. YTD rebased OCF growth was 3.6% to $3.9 billion, including 5.2% growth in Q3 YTD results supported by strong performances in Belgium and Virgin Media.