IMM PE invests $190m in Korean cable TV operator T-Broad
IMM Private Equity has acquired an approximately 21% stake in T-Broad Holdings, South Korea’s second-largest cable operator by subscriber numbers, for KRW200 billion ($190 million).
The deal is structured as two tranches - KRW100 billion in common stock and KRW100 billion in convertible preferred shares - and values the company at a price-to-earnings (P/E) ratio of less than 10x. CJ Hellovision, the largest player in the market, is currently trading at around 16x P/E.
IMM is now the second-largest shareholder in T-Broad. The company is majority-owned by Taekwang Group, a Korean conglomerate with interests spanning petrochemicals and textiles, finance, media and entertainment, and services and leisure.
CJ Hellovision, which is controlled by CJ Corp, went public in late 2012, raising $267 million. T-Broad is expected to follow suit within four years. The company has 3.5 million cable TV subscribers and generated revenues of around $750 million last year.
IMM will be represented on both T-Broad's board and its IPO committee. The private equity firm expects to support efforts to sign up digital TV subscribers as Korea continues its transition from analog to digital services and to roll-out value-added services such as video on demand, pay per view and music broadcasting.
Regulatory change is also expected in the multi-system operator (MSO) space, facilitating the acquisition of customers and licenses through M&A.
Korean cable television providers - which also offer broadband internet, voice over internet protocol, advertising and channel leasing services - have been a popular target for private equity investors, particularly in South Korea and Taiwan, for their strong recurring cash flow.
MBK Partners claims to be the largest private owner of cable television assets in Asia through C&M - one of Korea's leading MSOs, alongside CJ Hellovision and T-Broad - and Taiwan-based CNS.
T-Broad is the sixth deal from IMM Rose Gold Private Equity Fund II, which closed at KRW756 billion in December 2012 and is now more than 60% deployed. Recent investments include the joint acquisition of a 24% stake in POSCO Specialty Steel for KRW250 billion alongside Mirae Asset Management and the acquisition of a controlling stake in Holly F&B, parent of coffee shop chain Hollys Coffee.
The PE firm is also understood to be among the bidders for ADT Caps, the South Korean unit of US-based security systems specialist Tyco International.
More on Expansion
Latest News
Asian GPs slow implementation of ESG policies - survey
Asia-based private equity firms are assigning more dedicated resources to environment, social, and governance (ESG) programmes, but policy changes have slowed in the past 12 months, in part due to concerns raised internally and by LPs, according to a...
Singapore fintech start-up LXA gets $10m seed round
New Enterprise Associates (NEA) has led a USD 10m seed round for Singapore’s LXA, a financial technology start-up launched by a former Asia senior executive at The Blackstone Group.
India's InCred announces $60m round, claims unicorn status
Indian non-bank lender InCred Financial Services said it has received INR 5bn (USD 60m) at a valuation of at least USD 1bn from unnamed investors including “a global private equity fund.”
Insight leads $50m round for Australia's Roller
Insight Partners has led a USD 50m round for Australia’s Roller, a venue management software provider specializing in family fun parks.