Providence Equity Partners has exited online video platform iQiyi.com in a trade sale to Chinese search engine giant Baidu, according to a company statement.
Baidu agreed to purchase Providence’s shares in iQiyi.com for an undisclosed amount.
In 2010, Providence took a $50 million minority stake in the website alongside Baidu, which held a majority stake, PE Asia reported earlier.
iQiyi is the first online video platform in China to focus exclusively on professionally-produced content, and was ranked number two in the country in terms of total monthly time spent on the website, according to the statement.
The exit will give Baidu a substantial majority stake in iQiyi, according to a joint statement. The deal is expected to be completed sometime in the fourth quarter, when iQiyi will be completely consolidated into Baidu’s financial statements but will continue to operate as a separate brand.
Providence plans to further cultivate the domestic market and identify and support local firms with strong growth potential.
Last week, Providence opened its first PRC office in Beijing. Six professionals will man the office, including Providence managing director Tao Sun, according to a firm statement. Sun was previously a partner with Actis, where he was responsible for investments in the global education sector, and joined Providence at the end of 2011, PE Asia reported.
“Providence plans to further cultivate the domestic market and identify and support local firms with strong growth potential,” Sun said in the statement.
The firm has invested in seven companies in Asia since 2006, totaling $1.6 billion. It set up offices in Hong Kong and New Delhi in 2007, and focuses on the media, communications, education and information sectors.
Worldwide, the firm has $27 billion assets under management, and is headquartered in Rhode Island. As of July, the firm has raised $4.5 billion for its latest fund, Providence Equity Partners VII, which will likely end up around $5 billion, under its $6 billion target, according to PE Asia’s data division.