Thursday, American International Group, Inc.'s (AIG) investment unit AIG Global Investment Group, or AIGGIG, signed a deal with Novator and Viva Ventures GmbH to buy Viva's 65% stake in Bulgarian Telecommunications Co. AD or BTC for BGN 2.11 billion or Euro 1.08 billion. As part of the deal, which has been signed through AIGGIG's member company AIG Capital Partners, Inc., AIGGIG expects to secure an additional 25% stake in BTC, the former state-owned telecommunications company.
Viva is the investment arm of Boston-based private-equity firm Advent International Corp. and Novator Holdings. Novator is a London-based permanent capital investment firm founded by Thor Bjrglfsson.
In the transaction, which is expected to be the largest private M&A transaction in Bulgaria to date, AIGGIG will pay BGN 11.25 or Euro 5.75 per share for the 65% BTC stake. The purchase price also includes the recently proposed dividend of BGN 0.55 or Euro 0.28 per share. This values the entire equity of BTC at BGN 3.25 billion or Euro 1.66 billion.
BTC said that the transfer of shares to AIGGIG will take place on or after June 11, 2007. Following the completion of acquisition, AIGGIG will launch a tender offer for the remaining BTC shares.
AIG New Europe Fund II, L.P., a private equity fund focused on direct investments in Central and Eastern Europe, will fund a portion of the equity commitment. UBS, Allen & Overy and LIC Penkov, Markov & Partners advised AIGGIG on the transaction, while Novator was advised by Lehman Brothers, Linklaters and Djingov, Gouginski and Kyutchukov & Velichkov.
While commenting on the deal, Pierre Mellinger, who has the overall responsibility for AIG Capital Partners' private equity activity in Central and Eastern Europe, said, The acquisition of BTC fits well into our strategy of investments in this growing region and builds on our extensive previous experience in Bulgaria and the telecom sector.
BTC is one of the largest ISPs in Bulgaria and is the principal provider of satellite communications in the country. Vivatel, the third mobile operator in Bulgaria, is being owned by BTC. During the past three years, the company has undergone a significant transition, generating pre-tax profit of Euro 76 million for fiscal 2006, on revenues of Euro 516 million.
AIGGIG manages more than US$687 billion in assets, including approximately US$579 billion of AIG affiliated assets. As a member company of AIGGIG, AIG Capital Partners is a leading private equity investor in emerging markets.
Novator has investments in Bulgarian businesses since 1999. According to Novator, since the privatization of BTC, it has become a leader in technology, operations and services through an extensive investment program of nearly Euro 500 million.
Novator's international investment portfolio is focused around three main sectors, namely Telecommunications, Pharmaceuticals and Financial Services. Novator launched a Special Situations Fund in 2004 and a Credit Opportunities Fund in 2006. Novator has over Euro 7 billion of assets under management.
For comments and feedback: editorial@rttnews.com