July 10 (SeeNews) - Multi-play operator United Group, backed by US investment firm KKR and the European Bank for Reconstruction and Development (EBRD), has agreed to acquire the Croatian and Slovenian media portfolio of Central European Media Enterprises (CME), KKR said on Monday.
In a separate statement, CME said that the cash purchase price for the media portfolio is 230 million euro ($262.2 million), subject to customary working capital adjustments.
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The portfolio of assets which United Group has agreed to buy includes TV channels POP TV in Slovenia and Nova TV in Croatia, KKR said in a statement.
The transaction is expected to close by year-end.
United Group plans to invest in Nova TV and POP TV to further build their local production capabilities and expand their reach beyond their respective local markets by leveraging its regional and international footprint, the statement added.
"KKR has a strong track record of supporting media and telecom businesses to grow further in the current digital ecosystem. By investing in high quality local and international content, we will support the United Group teams to continue to offer differentiated and attractive content to all its customers across the region," Jean-Pierre Saad, director at KKR, was quoted as saying.
For its part, CME said it will use the proceeds of the sale to repay the 250.8 million euro term loan due in 2018.
"Once closed, the cash proceeds from this sale will greatly accelerate our plans for debt reduction, lowering our net leverage ratio by about one turn, cutting our current average borrowing rate by more than a third, and helping us to save over $30.0 million in annual interest costs," Michael Del Nin, co-chief executive officer at CME, is quoted saying.
The combined OIBDA for Nova TV and POP TV for the twelve months ended March 31, 2017 was $13.8 million, CME said.
KKR is a leading global investment firm that manages investments across multiple asset classes including private equity, energy, infrastructure, real estate, credit and hedge funds.
CME is a media and entertainment company operating leading businesses in six Central and Eastern European markets with an aggregate population of approximately 50 million people. It currently broadcasts 36 television channels in Bulgaria, Croatia, the Czech Republic, Romania, the Slovak Republic and Slovenia.
($=0.8772 euro)