MTG takes 75% of Trace

Modern Times Group (MTG) s buying a 75 per cent stake in pay-TV operator Trace TV.  Trace Partners is a French-based youth brand and near-global pay-TV operator. Its three music channels, Trace Urban, Trace Tropical and Trace Africa plus its sports offering Trace Sports Stars, are carried to 160 countries worldwide, including 55 nations in Africa.

MTG says an agreed enterprise valuation on the business was €40 million, and MTG is buying its 75 per cent from the private equity investors Citizen Capital, Enterprise Venture and Next Stage.  Trace’s existing management will hold on to their 25 per cent stake.

Trace has generated 23 per cent compound annual net sales growth over the five years to the end of 2013 and reported preliminary net sales of €19.3 million for the full year 2013. Trace generates almost half of its revenues in Africa and other Emerging Markets. The company had 37 million paying subscribers as at the end of December 2013, up from 27 million at the end of 2012, and also generates a growing proportion of its sales from advertising, events, content and brand licensing.

The transaction is subject to regulatory approval by the French media authorities and MTG will consolidate Trace’s results in the Group’s accounts with effect from the closing of the transaction.

Olivier Laouchez, Trace Co-founder, Chairman and CEO, commented: “We are just at the beginning of the mobile and digital revolutions. In the coming 5 years, the media industry will dramatically change. MTG has the right set-up and vision to make Trace a leading and cool entertainment multimedia brand for the youth generation, worldwide. We are extremely confident that the synergies, resources and opportunities provided by MTG and its great team will make us achieve this goal faster and better, while preserving Trace’s unique identity and entrepreneurial dynamics.”

Posted by on Feb 25 2014. Filed under Articles, Business, M&A, Pay TV.

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