US private equity firm Veronis Suhler Stevenson is set to make its first investment in Spain, taking a minority stake in mobile content provider LaNetro Zed.
A market source said VSS would take a stake of about 11 percent, valuing the buisness at about €400 million ($544 million).
VSS, which specialises in the media and communications sectors, plans to utilise its expertise and contacts to help the company drive its global expansion, with a particular focus on the US market. Morgan Callagy, managing director of VSS, said his firm could bring “a lot of networks and relationships both in Europe and the US.” This was vital since nobody really knew where the mobile market was heading, he added.
LaNetro Zed, known as Zed, is a Madrid-based provider of value-added services for mobile phones, including games, music and technology to facilitate blogging, chat and mobile dating. Following its acquisition of UK rival MonsterMob last year, it is now the biggest firm in the sector worldwide by revenue with operations in 31 countries across Europe, Asia, North America and Africa. The business employs over 1200 people.
Callagy said this scale was critical. “The mobile content industry is a fast growing industry, and one where size and scale are essential to succeed. With its acquisition of Monstermob, Zed now has a truly global footprint and is well positioned to succeed in this dynamic market.”
The market for mobile content is expected to be worth several billiion dollars globally. Callagy said: “The mobile sector is one of the key pillars of the media strategy that you see coming together [at large companies].”
Zed is still majority-owned by its Spanish founders, the Perez family. However, VSS will not be its first external investor – the company is currently backed by Spanish investment group Torreal and Spanish publishing company Grupo Planeta, who also hold minority stakes.
Zed will be looking to capitalise on VSS’s extensive experience within this sector. The firm has owned a number of directories businesses, including the Holland-based Yellow Pages Group, which had a mobile content operation. Other investments in the media space include digital satellite broadcaster The Chart Show Group and German newspaper publisher Berliner Verlag.
The firm has been investing heavily this year, having already completed deals for Cambium Learning, Medizine and Advanstar.