EQT exits Taiwan’s Gala TV
EQT Partners has exited Taiwanese cable TV operator Gala Television Corp. to the management of local conglomerate Formosa Plastics Group.
According to a statement, the buyer is Yung-tsai Investment, an investment vehicle owned by Formosa's co-founder, Wang Yung-tsai, Wang Weng-Tsao, chairman of Formosa Plastics Marine, a subsidiary of the group, and Wang Wen-Yuan, president of Formosa Plastics Group.
The transaction received regulatory approval in July 25 and closed on August 8. In April, Formosa confirmed that it would buy the private equity firm's approximately 95% interest in Gala for an undisclosed sum.
Established in 1997, Gala is one of Taiwan's leading TV content providers with four channels carried by all major cable operators. Its content includes in-house produced, commissioned and acquired material. The company's Chinese-language library has proved attractive for both domestic and to overseas viewers in places such as China and Southeast Asia.
It reported EBITDA of NT$726 million in 2012, with sales reaching NT$2.2 billion, but the industry as a whole has seen a massive influx in competition following the switch to digital broadcasting, which has put pressure on subscription fees.
"Gala TV has developed its offering and content production during EQT Greater China's ownership and is today a cable TV channel operator with strong in-house content production capability. We are convinced that Gala TV will continue its growth path with Yung-tsai Investment as their new partner," Martin Mok, a partner of EQT, said in the statement.
Formosa bought a 23% stake in Gala in 2002 for NT$400 million, exiting its holding six years later when North Asia-focused buyout firm MBK Partners bought 70% of the company for $100 million. The remainder was owned by Yang Teng-Kuei, a Taiwan entertainment mogul and ex-Gala chairman, and several local businesses.
Early 2011, EQT teamed up with Lin Poa-Chuan, CEO of Gala TV, to acquire undisclosed stakes in the company via its EQT Grater China II, a $535 million vehicle which was closed in 2005.
EQT appointed an industrial board of directors with media experts to support the company in developing it content production capability.
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