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Cobaltum Advises Eutelsat on sale of Alterna’TV to CANAL+

Cobaltum Advises Eutelsat on sale of Alterna’TV to CANAL+

Cobaltum Advises Eutelsat on sale of Alterna’TV to CANAL+
Transaction Overview:
  • On April 7, 2016, CANAL+ Group, a subsidiary of global media firm Vivendi (ENXTPA:VIV / Market Cap: ~$28.8 billion), announced the acquisition of Alterna’TV from Eutelsat Americas. The transaction was completed by CANAL+ subsidiary THEMA, and includes long-term agreements for the lease of capacity on the EUTELSAT 113 West A and EUTELSAT 117 West A satellites
  • Founded in 2004, Alterna’TV is a content distribution platform that provides primarily Latin American channels to cable, DTH and IPTV operators in the US. Alterna’TV represents an attractive portfolio of high-quality channels, and currently reaches over ten million subscribers across the Americas. Alterna’TV is a wholly-owned subsidiary of Eutelsat Americas (formerly Satmex)
  • THEMA is a distributor of pay TV channels to cable, IPTV, DTH, operators, as well as to mobile and OTT platforms.  THEMA has a portfolio of over 100 channels and has established strong relationships with leading pay-TV platforms in Europe, the Middle East, Africa, Asia and North America. CANAL+ Group acquired a controlling stake in THEMA in 2014
  • Eutelsat Communications (ENXTPA:ETL / Market Cap: ~$7.4 billion) is one of the world’s leading operators of communications satellites.  Eutelsat provides capacity on 40 satellites to clients that include broadcasters and broadcasting associations, pay-TV operators, video, data and Internet service providers, enterprises and government agencies. Eutelsat’s satellites provide ubiquitous coverage of Europe, the Middle East, Africa, Asia-Pacific and the Americas, enabling video, data, broadband and government communications globally.  Eutelsat was founded in 1977 and is headquartered in Paris
Strategic Rationale:
  • Divestiture of Non-Core Operation: Alterna’TV was originally founded by Satmex in 2004 in order to drive video traffic to its satellites, thereby improving its video-to-data traffic mix.  Over the next decade, Alterna’TV experienced a period of sustained high growth as it added new channels to its portfolio and new US pay-TV distribution partners, including DirecTV, Comcast, Verizon, Time Warner and AT&T, among others.  Eutelsat acquired Satmex in 2014, and subsequently determined to divest Alterna’TV to focus exclusively on the growth and consolidation of its core satellite communications business
  • Long-term Satellite Capacity Agreements: As part of the transaction, Eutelsat secured attractive long-term lease capacity agreements from THEMA/CANAL+ on its EUTELSAT 113 West A and EUTELSAT 117 West A satellites.  This was a key consideration for Eutelsat from the outset, and securing these agreements from a world-class counterpart such as CANAL+ represents an ideal outcome for Eutelsat
  • Complimentary Footprint: The acquisition of Alterna’TV significantly accelerates THEMA’s entry into the US and LATAM markets.  Alterna’TV reaches over 10 million subscribers throughout the Americas, and has established long-term relationships with all major US pay-TV operators.  THEMA will combine its existing North American business with the acquired Alterna’TV operations, to create “Thema America”, an integrated business unit that will look to replicate the company’s successful European model in the Americas

Cobaltum Role / Results:
  • Cobaltum acted as the exclusive strategic and financial advisor to Eutelsat in the sale of Alterna’TV
  • Cobaltum advised Eutelsat throughout the entire sales process of Alterna’TV, from devising the sale strategy, identifying and contacting potential buyers, managing a competitive auction process, to buyer selection, due diligence process, and negotiation and execution of definitive transaction documents
  • Cobaltum obtained excellent financial terms for Eutelsat, achieving an attractive purchase price (terms not disclosed), while simultaneously securing profitable long-term satellite capacity agreements, on market terms, with an outstanding counterpart
  • Cobaltum was instrumental in achieving an optimal outcome for our client by devising a tailored, targeted auction process, creating a healthy, competitive environment amongst potential buyers and closely managing all aspects of the transaction.  This process led to multiple competitive bids, allowing Eutelsat to select an ideal suitor based on a combination of overall deal economics and strategic fit.  Ultimately, this translated into an attractive valuation and significant long-term economic value to our client in the form of long-term satellite capacity agreements