Mid Europa Partners, the Hungary-headquartered private equity firm, has sold Karneval Media and Forcable, two Czech cable TV operators, to Liberty Global Europe, for €322.5m.
The deal is expected to complete in October 2006 following regulatory approval, and will earn Mid Europa 7.7x on its original 2003 investment and 4x its follow-on investment made in 2005. Baring Communications Equity will also sell its stake.
Karneval Media and Forcable will become part of Liberty’s broadband division UPC Central Europe, giving the company a massive stranglehold over the cable TV market in the Czech Republic. UPC is already the number one cable TV provider, and Karneval is the second largest.
Craig Butcher, partner of Mid Europa, said: “Since our original investment in Karneval in 2003, the company has doubled in terms of revenues and profitability. During our ownership the company has also rolled out broadband Internet services and recently launched digital video services, thereby becoming one of the leading players in the Czech telecommunications market.”
Mid Europa made the investments through AIG Emerging Europe Infrastructure Fund, the US$550m fund it launched in 1999.