Poland’s main satellite TV provider Cyfrowy Polsat is to buy Telewizja (TV) Polsat, its parent company, for approximately PLN3.75bn (US$1.3bn) in a cash and share deal.
Cyfrowy will pay PLN2.6bn (US$900m) in cash and the rest will be in the form of 80…
Poland’s main satellite TV provider Cyfrowy Polsat is to buy Telewizja (TV) Polsat, its parent company, for approximately PLN3.75bn (US$1.3bn) in a cash and share deal.
Cyfrowy will pay PLN2.6bn (US$900m) in cash and the rest will be in the form of 80 million shares valued at PLN 14.37 (US$5) each. The company said it would assume all assets and liabilities of TV Polsat, including net cash of PLN150m (US$52m).
The acquisition values TV Polsat at 11.8 times 2010 EBIDTA, according to a company statement. To finance the acquisition, the DTH platform is currently negotiating a bank loan of PLN1.4-1.6bn (US$485-554m), a bridge facility of PLN1.2-1.4bn (US$416-485m) and a revolver of PLN 200m (US$69m). The facilities will have a maturity of about five to seven years, and will likely be refinanced in part or whole in 2011.
Following the transaction, total net debt will reach 4x combined 2010 EBIDTA but is expected to be reduced to 2x combined EBIDTA within three years.
Cyfrowy’s head of investor relations told SatelliteFinance that the transaction is expected to close in March 2011 but declined to comment on the advisers.
TV Polsat, Poland’s second largest television channel, was founded in 1992 by Polish billionaire Zygmunt Solorz-Zak. Along with associate Hieronim Ruta, Solorz-Zak owned 100% of TV Polsat both directly and through investment vehicles Karswell Ltd and Sensor Overseas Ltd. The two men also own a majority stake (65.2%) in Cyfrowy via their investment vehicle Polaris Finance with the rest being held by public shareholders.
While Polaris’ holding in Cyfrowy will be diluted to 50.2% following the sale, Solorz-Zak and Ruta actually increase their ownership due to their 100% control of TV Polsat.
The 80 million Cyfrowy shares that are part of the transaction will give the pair an extra 23% in equity, meaning their holding will now amount to 73.2%. The other 26.8% will be owned by public shareholders.
Through this deal, the two Polish entrepreneurs net themselves a significant cash dividend of around PLN2.6bn (US$900m) as well as create Poland’s largest media company by sales.
According to Cyfrowy, the companies generated combined revenues of PLN2.3bn (US$800m) in 2009, greater than the PLN2.2bn (US$765m) posted by Telewizja Polska, Poland’s public broadcasting corporation.
