The Carlyle Group has agreed to a share swap deal with telecommunications company Taiwan Mobile.
The private equity firm will exchange its stake in kbro, a Tawainese cable television operator, for a 15.5 percent stake in Taiwan Mobile and TWD440 million ($14 million; €9 million) in cash, according to a Taiwan Mobile presentation.
The transaction values kbro at TWD32.8 billion, or 10 times EBITDA. As part of the transaction, Taiwan Mobile will assume the company’s debt of TWD$24 billion, as of 30 June 2009, the presentation noted.
Control: Carlyle gives up its stake in kbro
The deal is subject to Taiwan government approvals. It would see Carlyle become the second largest shareholder in Taiwan Mobile after Taiwan’s Tsai family, which hold a stake of 18.2 percent. The firm will also have two seats on the company’s board.
Following the completion of the deal, Taiwan Mobile would be the largest cable TV player in Taiwan, with a market share of 32 percent.
Carlyle acquired kbro for an undisclosed sum in 2006. The investment was made out of Carlyle Asia Partners II, which closed on $1.8 billion in July 2006.
Kbro is not Carlyle’s first investment in Taiwan’s cable television sector. In 1999, the firm is understood to have invested about $171 million to create Taiwan Broadband together with Taiwanese conglomerate Shin Kong Group.
In 2005, the firm sold its stake in Taiwan Broadband Communications to Macquarie Media Group and Macquarie Bank for A$1.2 billion ($1 billion; €712 billion).
Currently, Carlyle is in the market with its third Asian buyout fund, having raised a little over $2 billion toward its reported target of around $3 billion. It's also raising its second Asian real estate fund, targeting $1 billion.
In June, the firm closed Carlyle Asia Growth Partners IV on $1.04 billion.
Founded in 1996 and formerly known as Eastern Multimedia Company, kbro has 12 cable television systems across Taiwan and more than 1.1 million subscribers.