Mid Europa seals 828m Czech exit

A Mid Europa-led consortium is selling its stake in T-Mobile Czech Republic

Mid Europa Partners has sealed its latest exit, selling its entire stake in T-Mobile Czech Republic (TMCZ) to Deutsche Telekom for €828 million.

A consortium called Falcon Group – of which Mid Europa owned a 75 percent stake – acquired a 39.23 percent in TMCZ in 2006, along with 100 percent of Ceske Radiokomunikace (CRa), a telecom towers subsidiary of TMCZ.

TMCZ has since become the market leader in mobile services in the Czech Republic, boasting more than 5.8 million subscribers, while also building a presence in fixed line and B2B services.

Falcon sold CRa in 2011 for around €574 million, reducing the level of debt in the parent company. A year later the group raised a record debt package of CZK 9.1 billion (€365 million; $473 million) from six banks to fund a dividend recap of its investment in TMCZ.

Robert Chmelar, Mid Europa's associate director, described the sale – which is expected to close by the end of February – as “yet another landmark deal executed by Mid Europa in the Czech Republic, which continues to be one of the core markets for our firm.”

Mid Europa, which focuses on Central and Eastern Europe and Turkey, has been investing in the region since 1999 and advises and manages funds worth around €4 billion in total. Last year it exited Serbian TV provider SBB/Telemach, netting a 3x return, and sold Lux Med, a provider of healthcare services in Poland, to UK’s Bupa, generating a 2.5x return. Mid Europa also bought a 75 percent stake in Polish ski lift operator Jaworzyna Krynicka.

Mid Europa Partners is currently nearing a first close of between €600 million and €700 million for its fourth buyout fund, PEI reported in December. The firm, which came to market in February last year, started a rolling first close at the end of September with commitments of approximately €200 million, which have gradually increased since then. Mid Europa originally targeted €1 billion for its latest fund, but agreed with LPs to cap the fund at €850 million.