International Internet Magazine. Baltic States news & analytics
Thursday, 23.03.2017, 14:20
Expert: MTG sold Baltic businesses at a good price
"It was a very good deal, because 12xEBIT shows that the former owner sold (the business) at a really good price," told Marius Dubnikovas, chairman of the Tax Commission at the Lithuanian Business Confederation.
"On the other hand, the buyer really wanted that deal and paid a solid EBIT multiple. This wasn't going through the market and buying a cheap thing. It was a purposeful purchase. From the financial point of view, a good price was offered and it was paid," he said.
MTG sold 100 % of its Baltic business to the global private equity firm Providence Equity Partners for 115 mln euros, which is equivalent to 12 times EBIT for the full year 2016.
Dubnikovas noted, however, that the business' historical EBIT performance should be look at to see how good the price is.
"We should look at how stable that EBIT is and if this is a usual result. Perhaps the 2016 result was lower for some reasons. The historical performance should be looked at to see how fluctuating it is. The assessment may depend on this," he said.
EBIT results for the Baltic businesses are not available separately in MTG's reports.
Providence Equity Partners owns the Lithuanian mobile operator Bite Lietuva. Dubnikovas said he believes that there could be potential synergies between Bite and the acquired TV and radio channels and news websites.
The private equity firm last year sought to take control of the Estonian telecom group Starman, which owns the Lithuanian TV services provider Cgates, but the deal did not take place.