Working alongside global counsel Mannheimer Swartling, Sorainen has advised Providence Equity Partners on the acquisition of the Baltic businesses of Swedish media holdings Modern Times Group. Allen & Overy advised Providence on financing for the acquisition. Cobalt — working alongside Sweden's Hamilton law firm — advised the Modern Times Group on the deal.
The total disclosed value of the acquisition in all three Baltic States is EUR 115 million -- equivalent to 12 times FY 2016 EBIT. Closing is subject to regulatory approvals.
Providence Equity Partners is a global asset management firm with USD 45 billion in assets under management across complementary private equity and credit businesses. It focuses on media, communications, education, and information investments.
Among the MTG-owned businesses acquired by Providence are: Three TV channels in Estonia (TV3, TV3+, TV6), five TV channels in Latvia (TV3, TV3+, TV6, Kanals 2, LNT), three TV channels in Lithuania (TV3, TV6, TV8), the pan-Baltic pay TV company Viasat, and nationwide commercial radio stations. According to Sorainen, "MTG Baltics is the leading pan-Baltic Media House with free TV and pay TV broadcasting assets together with complementary radio assets and strong digital presence. MTG Baltics has a 20 year history of operating in the Baltics, with a strong track-record of primarily organic growth."
According to Allen & Overy, "the sale reflects MTG's ongoing transformation from a traditional national broadcaster into a global digital entertainer, capitalizing on rapid changes in consumers' media consumption habits. MTG will use the proceeds from the sale to transform the company further."
Karim Tabet, Managing Director at Providence: “MTG’s Baltic broadcasting businesses are all leaders in their respective areas and we’re excited to partner with such a talented group of people to grow the company together. After our acquisition of Bite in 2016, this transaction highlights Providence’s continued commitment to investing in the Baltic region.”
Robert Sudo, Managing Director at Providence, added: "Lithuania, Latvia and Estonia are all among the fastest growing countries in the EU. The business friendly environment combined with a highly skilled workforce make the Baltics an exciting region for us. We are looking forward to working together with MTG Baltic's management and employees over the coming years."
Jorgen Madsen Lindemann, MTG President & CEO, commented: "We have been in the Baltic region for two decades, and our very dedicated and professional colleagues have built a successful business here. I would like to take this opportunity to thank our local team for an extraordinary performance over the years. We are on a journey to build an even stronger presence in the global digital arena, and I am happy that we have found a buyer that shares our view of the potential of the Baltic businesses. Our Baltic colleagues can look forward to a new era that taps the full possibilities of the Baltic media market."
Sorainen's team was led by Partners Laimonas Skibarka and Eva Berlaus and included Specialist Counsel Stasys Drazdauskas and Mantas Petkevicius, Senior Associates Janis Bite, Jonas Kiauleikis, and Juulika Aavik and other lawyers. Sorainen also advised Providence on its 2015 acquisition of Bite, the Lithuanian and Latvian mobile operator (as reported by CEE Legal Matters on December 29, 2015).
The Allen & Overy team was led by London-based Partner Timothy Polglase.
The Cobalt team advising MTG included Lithuanian-based Managing Partner Irmantas Norkus, Partner Juozas Rimas, and Associate Evaldas Petraitis, Estonian-based Partners Martin Simovart and Peeter Kutman and Senior Associate Karl Kull, and Latvian-based Managing Partner Dace Silava–Tomsone and Senior Associate Elina Locmele.
Editor's Note: After this article was published, in October 2017, the Fort law firm announced that the deal had closed, and that it had worked alongside Sweden's Hamilton law firm, the global counsel for MTG, and in liaison with Latvia's Skopiņa & Azanda firm, in providing "full competition and regulatory support and advice to MTG throughout the process," including: (1) screening potential and actual bidders for potential competition and regulatory risks before and during the auction process; (2) providing competition law advice for the appropriate handling of potentially sensitive information during the buyer’s due diligence process and between signing and closing of the transaction; (3) providing support and advice in obtaining the regulatory/government approvals from the Cabinet of Ministers in Latvia and from the Radio and Television Commission of Lithuania; and (4) providing support and advice in obtaining merger clearances from the Latvian and Lithuanian Competition Councils.
The firm's pan-Baltic team was led by Partner Rene Frolov and included Partner Andrius Mamontovas and Associate Aiste Samuilyte-Mamontove in Lithuania, working alongside Skopina & Azanda Managing Partner Ieva Azanda in Latvia.