Market Insight

MTG to acquire 75% of French pay tv operator Trace

February 25, 2014

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Modern Times Group, the Swedish media company and owner of Viasat channels, has agreed to acquire 75% of pay TV channel group Trace Partners from private equity groups Citizen Capital, Entrepreneur Venture and NextStage. Trace has operations in 160 countries worldwide with a major presence in Africa where it is active in all 55 countries. The deal if approved by the French media regulator will value Trace at EUR 40.0 million. Management will keep 25% of the firm.

Trace's channels target the 18 – 35 demographic. It operates three music channels and a sports channel with Trace Urban being the most successful; reaching 130 countries. It also owns Trace Sports Stars, a lifestyle network focusing on the lives of sports celebrities that broadcasts in 108 countries. The four channels combined have 16 different localized feeds and are available in 11 languages worldwide.  

Trace has seen a 23% compound annual net revenue growth since 2008 with half of the 2013 revenues coming from Africa and Emerging Markets. In 2013, Trace grew its subscriber base by 37% reaching a total of 37 million paying customers.

Our take

MTG's major operations are in the Nordics and Eastern Europe. It has a limited presence in Africa through its Ghana-based production company Modern Africa Productions as well as entertainment channel Viasat 1 in Ghana and pay channels Viasat Nature, Viasat History, Viasat Explorer and Viasat Crime which are available in Kenya, Nigeria, Uganda, Tanzania and Rwanda.

As well as expanding its African channel portfolio the Trace acquisition will give it significant increase in footprint across the whole of the continent as well as a foothold in the Caribbean and Latin America. MTG could also benefit from Trace’s other sources of revenue such as brand licensing/content, event organizing, radio and internet presence.Africa and Latin America are key emerging markets for channel groups looking to expand outside of Europe and the USA.

 

 

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