KKR in $175m Swiss media deal

This will be the last investment from KKR’s European Fund III

Kohlberg Kravis Roberts has agreed to acquire a significant minority stake in Ringier, a Swiss media business.

KKR will acquire 49 percent in each of Ringier’s digital subsidiaries, Scout24 Schweiz and Omnimedia. Scout24 Schweiz is an online marketplace which includes autoscout24.ch and motoscout24.ch, a digital platform for buying and selling motor vehicles, and property website immoscout24.ch.

Financial details of the deal were undisclosed, but a source close to the matter said KKR bought its stake for $175 million of equity. KKR declined to comment on deal financials.

KKR said it would help to drive greater digitalisation of the business. Ringier already generates 30 percent of its revenues in this area, and the firm intends to increase that share to 50 percent over the next three to four years, it said.

KKR started negotiating with the family-owned business six to nine months ago, Philipp Freise, head of the European media & digital investment team at KKR, told Private Equity International.

“When we met the family, we said: don’t be afraid of private equity. We want to be solution providers; therefore we are happy to be the minority owner and happy not to use debt in the deal, which was something they were not so familiar with. Being flexible as a private equity firm means you have access to a wider spectrum of deals. This will be a trend going forward.”

Convincing family-owners to sell can be challenging in Germany, a number of GPs told PEI last month. “In some countries, you can call a management team in a company or an owner and you agree to talk to them; in Germany, it’s very hard to get a foot in the door,” Peter Wirtz, head of 3i Germany said. “You can’t just call someone and say: ‘We’d like to talk to you about your business’. You can hardly get any traction with that.

“Family owners often feel concerned that they are going to be pointed at as the generation that sold out, and therefore it’s inherently more difficult to bring them to the table,” Mark Nicolson, a partner at SL Capital Partners, added.

KKR’s investment in Ringier follows a range of digital media deals KKR has done in recent years. These include BMG Rights Management, which was a joint venture with Bertelsmann, Fotolia, ProSiebenSat.1, GoDaddy, InternetBrands and Mitchell International.

The investment in Ringer will be the last deal done from KKR’s European Fund III, a $6.79 billion 2008-vintage. The firm is currently in market raising its fourth European fund, which has a target of €3 billion. KKR declined to comment on fundraising.

Click here to read the whole Germany roundtable, which features in PEI’s July/August issue.