KKR's United Group reportedly in talks to acquire Bosnia's M&H Company for EUR 23mn

By bne IntelliNews September 3, 2014

KKR's United Group, South East Europe’s leading regional pay TV platform, is in talks to acquire Sarajevo-based telecommunications firm M&H Company, Bosnian TV channel TeVe.ba reported on Sept 3, quoting a KKR statement.

KKR has informed it is providing its full support to its Telemach unit in Bosnia in the endeavour to take over M&H Company.

"Such investments provide direct benefits to the citizens via creating jobs and enhancing the quality of services, and also serve as an example to other foreign investors who consider investing in Bosnia and Herzegovina," the head of KKR's technology and communications team in Europe, Henrik Kraft, was quoted as saying in the statement.

The statement also said that the proposed merger, even though small as a share of the Bosnian telecommunications market (less that 5%), will create a valuable private company that could compete with the existing mobile, fixed-line, TV and internet operators in terms of technology, coverage, quality and prices.

Even though there has been no official information on the price of the merger, TeVe.ba has reported earlier the transaction is seen at some EUR 23mn. It is a subject to approval by the Bosnian regulators.

Privately-held M&H Company is reportedly one of the best telecommunications firms in Bosnia. It posted a BAM 4mn (EUR 2mn) profit for 2013, TeVe.ba said.

United Group operates in Southeast Europe under the SBB and Telemach brands. The group includes the largest cable operator in Serbia - SBB and the largest cable operator in Slovenia and Bosnia - Telemach, along with another 15 smaller firms.

As part of its expansion in the region, United Group reached in July an agreement to take over a majority stake in the first Montenegrin cable operator - Broadband Montenegro (BBM).

United Group already serves 1.89 million customers across the six markets of former Yugoslavia with a combined population of over 20 million. The group is also is in the final stages of launching a new news TV station in the Balkans region, to be called N1.

KKR wrapped up in March the EUR 1bn acquisition of the United Group from its peer Mid Europa Partners. The EBRD co-invested EUR 50mn alongside KKR in the transaction.

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