China’s Everbright, Baofeng buy control of MP & Silva
Two Chinese companies – Everbright Securities and entertainment specialist Beijing Baofeng Technology – have acquired a 65% stake in Italy-based sports media rights firm MP & Silva (MPS).
The deal is structured through Shanghai Jin Xin Investment fund, an investment vehicle set up by Everbright and Baofeng. Financial terms were not disclosed but media reports have put the implied value of the target company at about $1 billion. Existing MPS shareholders will maintain a significant role in the firm and retain a 35% interest.
Founded in 2004, MPS distributes television and media rights to global sports events, including the upcoming European football championship, the English Premier League and Spain's La Liga. Headquartered in London and Singapore, the company has regional offices in Beijing, Munich, New York and other cities. Its revenue came to about $600 million for the year ended June 2015.
MPS' major shareholders were Italian businessmen Andrea Radrizzani and Riccardo Silva, who together owned 80% of the company.
The partnership is expected to boost MPS' presence in China as well as open up new content distribution channels, thanks to Baofeng's expertise in virtual reality and digital entertainment. Baofeng has already announced plans to develop a sports channel and a series of sports apps.
"We are confident that, thanks to this partnership, MP & Silva will be able to strengthen its leadership position in the market and introduce new ground-breaking innovations," Baofeng CEO Larry Feng said in a statement.
Shenzhen-listed Baofeng offers online video and entertainment services. It set up a subsidiary called Baofeng Mojing, or Baofeng Magic Mirror, to focus on VR headsets that can be used to watch videos and play games on smart phones. The unit raised a RMB230 million ($35 million) earlier this year.
Culture and entertainment is one of the pillar industries in China's latest five-year plan, which outlines the government's economic priorities. Support for the domestic sports was also the subject of a State Council guideline that envisaged creating an industry worth RMB5 trillion by 2025.
A host of strategic and financial investors, including Dailian Wanda Group, Alibaba Group, Tencent Holdings, and CMC Capital Partners are active in the segment. For example, last year Wanda bought Infront Sports & Media, a Swiss sports marketing firm and a rival of MP & Silva, from European PE firm Bridgepoint for $1.2 billion.
Meanwhile, CMC paid a record $1.3 billion for broadcast rights to matches in China's domestic football league and Super Sports Media - an IDG Capital Partners-backed company that holds the mainland China broadcast rights for English Premier League football matches - listed in Hong Kong through a reverse merger.
UBS advised MPS on the deal while China International Capital Corporation (CICC) and online deals platform DealGlobe worked with Everbright and Baofeng.
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