On May 28, 2020, CEE Legal Matters reported that Cobalt had advised Lithuania's AB Lietuvos Radijo ir Televizijos Centras - Telecentras on the sale of its data transmission and digital television business developed under the Mezon brand to the Bite Group. We spoke Aida Raziulyte, General Counsel of Telecentras, to learn more about the deal.
CEELM: To warm up, please tell our readers a few words about yourself and Telecentras.
Aida: I am a General Counsel of Telecentras and was the internal lead of the project team from the seller’s side. We do not have an in-house legal team beyond myself.
Telecentras is a leading terrestrial TV and radio broadcast infrastructure operator in Lithuania, established back in 1926, and owned by the state. In 2001, in addition to radio and television program transmission, the company started providing data transmission services to consumers, mostly living in remote areas. In 2016 Telecentras launched IPTV services.
CEELM: Can you tell us a bit about the business case behind the sale of the data transmission and digital television business?
Aida: A year ago, the board decided to primarily focus on a core Telecentras’ activities, i.e. broadcast and other wholesale infrastructure services, and therefore exit the telco retail market, which is highly competitive here in Lithuania.
CEELM: What would you say was the most complex aspect of the deal? What were your main takeaways that you are likely to apply should a deal like this come about again?
Aida: Perhaps the most complex aspect was that it was an asset deal, which, even though more flexible, is also way more complex than a share deal. Not to mention that negotiations are very tough, for parties can bargain over which assets will be acquired and which liabilities will be assumed, as opposed to the share deal whereas company is taken over with all the assets and liabilities. In addition, it takes a lot of effort from the sellers team to both have a very clear vision on how two businesses, i.e. the remaining one and the one to be transferred, should operate after the transaction is closed, and to work out the specific details of carve-out to ensure flawless future transfer of the business under the sale, and the continuity of both the remaining business and the one to be transferred.
The main takeaway in this deal is about how crucial the engagement of the team is. You should not spare time and effort on keeping the team on the same page all the time — continuously aligning on the objectives and the vision — for a carve-out is a rather tough exercise, since business does not stop for a single day. It is about selling a “moving target,” with data changing over time, with the need to update it all again and again, i.e., during the due diligence process, during negotiations, and prior to signing. Without the team intact it is easy to lose both stamina and momentum.
CEELM: How was the legal work split between your own in-house legal team and that of Cobalt? Was the firm involved in the negotiations of the terms of the sale as well or only in drafting up the contracts?
Aida: We have entrusted Cobalt team with all the legal work of the process, including the negotiations part, where Partner Elijus Burgis provided a stellar performance — very constructive and with a business-minded approach — which helped to successfully close the deal.
CEELM: And while on the topic, why did you opt to have Cobalt specifically assist you on this deal?
Aida: We have chosen Cobalt based on the combination of both experience needed and the quote of the offer. As in many cases, however, especially in professional services, it turned out that what mattered most is the individuals you get on board.