Mid Europa Partners completes first Serbian leveraged buyout

Central and eastern European buyout specialist Mid Europa Partners has acquired television and internet company Serbia Broadband from Bedminster Capital Management, in the country’s first leveraged buyout.

Mid Europa Partners has bought Serbian television company Serbia Broadband from Bedminster Capital Management.

Terms were not disclosed, but a source close to the deal said it was in the region of €175-200 million ($235-269 million). Bedminster has used its SEEF II fund to roll back into the deal with a minority stake.

Serbia Broadband provides cable and satellite television as well as broadband internet in Serbia. It has almost half a million subscribers across its three service platforms.  The company has had an annual revenue growth rate of over 60 percent over the last two years, and is also expanding its presence in other countries in the former Yugoslavia.

Robert Knorr, who led the deal for Mid Europa Partners, said he believed this was the first leveraged buyout in Serbia and certainly the first example of a western-style private equity deal in the country. “There are a number of hurdles in Serbia for buyout firms, including strict controls from the government and the central bank on foreign lending,” he said.

Despite this, his firm had been able to acquire €80 million of leverage for the deal, he added. Italian bank Unicredit acting through Bank Austria Creditanstalt, Vienna, acted as sole underwriter and mandated lead arranger of the financing package.

“Serbia is not a member of the European Union but we believe with political changes the country will have closer relationships with Europe over time, even though to move forward in this the status of Kosovo will have to be resolved,” he added.   

Mid Europa advises and manages funds with committed capital in excess of €1.1 billion. It also owns Czech broadcaster Radiokomunikace, mobile company T-Mobile Czech Republic and Polish cable company Aster.

Last week Mid Europa and France Telecom/Orange bought One, the third largest mobile company in Austria for €1.4 billion, the largest ever leveraged buyout in the country.