GMT Communications Partners, the European mid-market investor focused on the media and telecommunications industries, has sold its stake in German cable TV company PEPcom to STAR Capital Partners.
Financial details were not disclosed, but the offer for PEPcom, a company which GMT started from scratch, was “in line” with market conditions, said GMT principal Vikram Krishna in an interview with PEO.
STAR Capital now owns an 81 percent stake with the management retaining the rest.
Prior to the deal, GMT owned 40.5 percent of the company with another private equity investor in media and telecommunications, VSS, owning another 40.5 percent.
PEPcom was started by GMT Communication Partners in 2001 as a platform to consolidate what Krishna described as a fragmented German cable market.
In 2003, GMT sold half its stake in PEPcom to VSS “to bring some additional firepower to the equity cheques that we were writing” said Krishna.
PEPcom made a total of 12 bolt-on acquisitions, including the 2005 purchase of Kabelfernsehen München ServiCenter, a Bavarian cable TV and broadband operator “which more than doubled Pepcom’s business”, according to a GMT statement.
“Our strategy was to create a business to end up as one of the most significant players in the German TV market,” said Krishna. “So our fundamental strategy behind the deal was to make those acquisitions in order to get it to the scale that was required.”
The PEPcom investment was made from GMT’s second fund, which closed on €365 million in 2000, according to data provider Privateequityconnect. The fund is now 100 percent deployed with “a couple” of investments left to realise, said Krishna.
Other Fund II investments included another cable TV operator, Netherlands-based Casema, which was acquired in 2003 and exited in 2006.
At the time of the sale, PEPcom is Germany’s sixth largest cable operator, with a 630,000-strong subscriber base.
STAR Capital Partners as established in 2000 and concentrates on buyouts in the telecoms, utilities and transportation sectors. It has over €1 billion of funds under management, according to its website.