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Cinven joins Eutelsat private equity club

Cinven has agreed to pay DeaSat €337 million for the Italian group’s 11% interest in the satellite operator which also counts Goldman Sachs, Texas Pacific, Lehman Brothers and Eurazeo among its backers.

European investor Cinven has become the latest leading private equity outfit to participate in the industry’s recent foray into the market for satellite operators.

The London-headquartered firm announced today that it has agreed to pay €337 million ($448 million) for an 11 percent interest in Eutelsat, the Paris-based operator of 24 satellites.

CSFB is arranging debt to fund the acquisition.

Cinven’s engagement at Eutelsat comes shortly after Goldman Sachs Capital Partners, the principal investment arm of Goldman Sachs, bought a 15.8 percent stake in the company for £363 million (€526 million; $675 million) last week.

Cinven, which is buying the Eutelsat stake from Italian holding DeaSat, is paying €3.10 per share. Goldman, buying of British Telecom, agreed to pay €3.30 per share. 

Eutelsat provides satellite-broadcasting services to an area stretching from the US eastern seaboard, across Europe and Africa to the Pacific. It was established as an intergovernmental organisation in 1977, and was incorporated as a France-based private company in 2001.

Eutelsat's founding shareholders included several national telecoms operators, including BT. Today the Belgian phone company Belgacom SA is the only national telecoms company to retain a stake.

The majority of Eutelsat’s equity is now held by private equity group. Alongside Cinven and Goldman Sachs, shareholders include Texas Pacific, Spectrum, Eurazeo and Lehman Brothers.

For the year ended 30 June 2004, Eutelsat reported revenues of €760 million, EBITDA of €599 million and net income of €270 million. The business employs 450 staff from 25 countries.