Apax Partners Invests $190m to acquire an interest in CME - CME sees boost to future strategic opportunities
29 August 2006
Apax will become a limited partner in a partnership holding all
of the Lauder interests in CME. The remaining 50.3% interest in the
partnership will be beneficially owned by Ronald Lauder and his
family. The deal is expected to close on Friday,
In connection with this transaction, the CME Board of Directors
has approved the election of Christian Stahl and Frank Ehmer of
Apax as directors.
Commenting on the announcement, Ronald S. Lauder, Non-Executive
Chairman of CME, said: "Since CME's initial public offering in
1994, the company has created tremendous value for shareholders.
This partnership allows me to diversify my personal investments and
recognize a return on a part of my initial investment in the
company, while remaining CME's largest shareholder. Further, it
provides CME with a strong financial investor and additional Board
Directors who share our commitment to building on the company's
leadership position and regional focus. As the largest broadcaster
in Central and Eastern Europe and with an outstanding management
team, CME is in a unique position to capitalize on the significant
growth opportunities in its markets."
Michael Garin, CME's Chief Executive Officer, said: "Apax's
investment is a confirmation of our strategy and a show of
confidence in the continued growth of our markets. Apax is an ideal
strategic and financial partner and with Christian Stahl and Frank
Ehmer joining our board we look forward to working with them as we
continue to execute our strategic plan. Our investors should
recognize that typically private equity firms seek returns of 2-3
times their investment. If Apax is able to realize this objective
all investors will realize the same returns for themselves with no
investor advantaged over one another. We share Apax's optimistic
view of our future."
Christian Stahl of Apax Partners, said: "CME is one of the
fastest growing and best managed media companies in the world and
represents an exceptional investment opportunity. We are impressed
with the company's business plan, management team and disciplined
financial approach. We are thrilled to acquire a significant equity
interest in CME and Frank and I look forward to working with our
new board colleagues and management team to build upon the CME
success story at a time when prospects are so bright, both for the
business itself and the markets in which the company operates."
The principal terms of the limited partnership include:
- At closing the partnership will own all of the issued and
outstanding Class B shares of CME (approximately 6.3 million) and
60,000 Class A shares of CME, which combined represent 15.7 percent
of the total outstanding equity of CME.
- Apax will acquire an economic interest in the partnership of
approximately 49.7%, in exchange for a purchase price of
approximately $190 million in cash. Following the transaction,
Ronald Lauder and other Lauder family members will have a 50.3%
economic interest in the partnership.
- RSL Investments LLC, which is 100% beneficially owned by
Ronald Lauder, will be the general partner of the partnership.
- After a period of three years, Apax can seek redemption or
sale of all or part of its interest in the limited partnership. Mr.
Lauder has the opportunity to acquire any such interest to be
redeemed. Any distribution of shares to Apax from the partnership
will be in Class A shares.
- The partnership will retain 64.8% voting interest in CME and
Apax will have 7.8% indirect economic interest.
Apax has been advised by JP Morgan and Skadden, Arps, Slate,
Meagher & Flom LLP. Ronald S. Lauder has been advised by GF
Capital Management & Advisors LLC and Debevoise & Plimpton
CME is a TV broadcasting company with leading networks in six
Central and Eastern European countries reaching an aggregate of
approximately 82 million people. The Company's television stations
are located in Croatia (Nova TV), Czech Republic (TV Nova, Galaxie
Sport), Romania (PRO TV, Acasa, PRO Cinema), Slovakia (Markíza),
Slovenia (POP TV, Kanal A) and Ukraine (Studio 1+1, Studio 1+1
International, Kino, City). CME is traded on the NASDAQ and the
Prague Stock Exchange under the ticker symbol "CETV".
About Apax Partners
Apax Partners (http://www.apax.com/)
is one of the world's leading private equity investment groups. It
operates across the United States, Europe, Israel and Asia and has
more than 30 years of investing experience. Funds under the advice
of Apax Partners total $20 billion around the world. These Funds
provide long-term equity financing to build and strengthen
world-class companies. Apax Partners Funds invest in companies
across its global sectors of Tech & Telecom, Retail &
Consumer, Media, Healthcare and Financial & Business Services.
Apax Partners' Funds investments include World Directories, Kabel
Deutschland, TIM Hellas, Inmarsat, Intelsat, PCM, HIT Entertainment
and Tommy Hilfiger.
Forward Looking Statements
This press release contains forward-looking statements. For
these statements we claim the protection of the safe harbor for
forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995. Forward-looking statements are
inherently subject to risks and uncertainties, many of which cannot
be predicted with accuracy or are otherwise beyond our control and
some of which might not even be anticipated. Future events and
actual results, affecting our strategic plan as well as our
financial position, results of operations and cash flows, could
differ materially from those described in or contemplated by the
forward-looking statements. Important factors that contribute to
such risks include, but are not limited to, the rate of development
of advertising markets in countries where we operate, general
market and economic conditions in these countries as well as in the
United States and Western Europe, the renewals of broadcasting
licenses, the ability to acquire programming and the ability to
attract audiences, the general regulatory environments where we
operate and application of relevant laws and regulations.
For further information visit www.cetv-net.com or
Director of Corporate Communications
Central European Media Enterprises
T: +44 20 7430 5357
Ira Wülfing Kommunikation
T: +49 89 20 00 30 30