Permira's third Asian deal a satellite play

Permira supported the management team of ABS in a management buyout, obtaining majority control of the satellite company, while ABS's Chief Executive Thomas Choi and his management team will hold a "significant stake" in the business.

Henry Chen, Head of Greater China and Head of the Hong Kong office of Permira, emphasized that the deal had been done with management support. Permira said that it gained exclusive negotiation rights from Citigroup, who led the sale process, because the firm has extensive knowledge of the satellite business.

The c.$200 million secondary buyout is a transaction type that has emerged more prominently post-GFC and resulted in significant discounts for buyers. In this case, the target is a very strong business in an industry that has been fairly resilient and recession-resistant, maintaining stable sales even after the GFC. Industry analysts said that, since the original acquisition of its flagship satellite (ABS-1) in 2006, ABS has increased its revenues by almost 500%, with around 95% of its capacity taken up in less than 30 months. Chen told AVCJ that the end user market for this type of business is rapidly growing, one of the key attractions of ABS.

Choi, a Korean American entrepreneur who established the company in 2006, has scaled the business to serve over 80 customer networks in around 30 countries. ABS now distributes around 175 TV channels in various languages. The management team are currently preparing to launch their new satellite, ABS-2, which will be one of the largest fixed-service satellites, with a scheduled launch date sometime in 2013. ABS-2 will have prime orbital locations covering highly populated regions, including Asia, Russia, Africa and the Middle East.

To deliver the next phase of growth for ABS, Permira will appoint two members of its firm with strong satellite experienceto the ABS board: Richard Sanders, head of Permira's global TMT group, and Nic Volpi. Chen said that, while they will oversee technology issues, Permira will add value to ABS by introducing new networks and resources to help the company grow via their Asian presences in Hong Kong, Japan and Korea.

This MBO is the third Asia-based deal for Permira. It acquired a 20% stake in Macau-based gaming group Galaxy Entertainment Group Ltd. in 2007, and bought out Tokyo-headquartered agrochemicals business Arysta LifeScience for some $2.2 billion in 2008.

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• Topics
• Greater China
• Technology
• Media
• Buyouts
• Henry L. Chen
• Permira Advisers
• Citigroup Venture Capital International Asia
• ADM Capital