Central European private equity group Mid Europa Partners has agreed to sell Hungarian broadband and telephone provider Invitel to China CEE Investment Co-operation Fund.
The deal values Invitel at €202mn, 4.5x the company’s 2015 EBITDA (€45mn). The price is relatively low compared to listed European telecommunication companies. Most recently, Crnogorski Telekom was purchased by Croatian T-Hrvatski Telekom at 5.1x enterprise value.
The proposed sale is subject to the approval of Invitel shareholders and the Hungarian competition authority. Mid Europa holds 51% in the Matel holding; the rest of the shares are held by Caymans-registered Matel Holdings. The transaction is expected to be completed in the first quarter of 2017.
Headquartered in Budapest, Invitel Group comprises domestic (Invitel Tavkozlesi) and corporate (Invitech Solutions) branches, providing fixed-line telecommunications and broadband services. The company covers 100 cities in Hungary and claims to serve more than 1mn homes in the country.
China CEE Investment Co-operation Fund was established by China Exim Bank in partnership with other institutional investors from the CEE region to capitalise on investment opportunities in CEE countries. According to its website it has $435mn of committed funds.
Rothschild, Dechert and EY advised the sellers in the transaction.
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