Baidu to acquire Providence Equity Partners' stake in iQiyi
Providence Equity Partners, the specialist media and communications GP, will sell its stake in China-based online video portal iQiyi.com to Baidu. Providence held the asset for two-and-a-half years, having reportedly invested $50 million.
The transaction is expected to close in the fourth quarter of 2012. Upon completion, Baidu will have a substantial majority stake in iQiyi, which will be consolidated into its financial statements.
Launched in April 2010 and originally known as "Qiyi", iQiyi delivers fully licensed, high-definition and professionally-produced content. According to iResearch, a China-based research firm, iQiyi was the number one online video platform in China in terms of average time spent per user and number two in terms of total monthly time spent.
"Online video is a key strategic vertical for Baidu as user numbers and time-spend continue to increase exponentially, underscoring the tremendous potential in the sector," Robin Li, chairman and CEO of Baidu, said in a statement. "We are very pleased with the progress iQiyi has made and have confidence that iQiyi's management will continue to grow its leading position."
The transaction follows Providence Equity Partners' divestment of its 10% stake in US-based online video site Hulu in October. According to Reuters, Providence sold the interest for $200 million, double its original investment.
Providence manages $27 billion in equity commitments and has invested in more than 130 companies since its inception in 1989.
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