Adrian Sarbu has entered into an agreement to transfer to the US group CME (Central European Media Enterprises), which owns PRO TV SA, all the entertainment operations held by MediaPro in a complex deal, which US bank Merrill Lynch put at 97.6 million dollars.
CME, which already owns 8.75% in Media Pro Entertainment (MPE), will pay Sarbu 10 million dollars in cash, give him 2.2 million shares of CME’s Class A Common Stock and a warrant to purchase up to 850,000 CME shares at today’s price. CME will also assume 35.6 million dollars in MPE debt and give back to Sarbu 8.75% of the other businesses that are part of MediaPro Management (Publimedia – publishing company, Coprint – printing firm, Mediafax - the leading supplier of general and business information in Romania, Media Pro Interactiv – Internet, Indoor Media – indoor advertising and MediaSat - telecoms).
MediaPro Entertainment includes Media Pro Pictures, Media Pro Studios, Media Pro Distribution, Pro Video, Media Pro Music & Entertainment, Cinema Pro, Hollywood Multiplex, the majority stake in Domino – commercial spots production company and Media Pro Pictures sro – the film operations in the Czech Republic.
Ronald Lauder, founder and non-executive chairman of CME, commented on the deal: "In the last 20 years, Adrian has built MediaPro Entertainment into a Hollywood style production and distribution business, unique in Central and Eastern Europe. This acquisition provides our stations with a proven source of content and allows us to further diversify our revenue streams."
Adrian Sarbu in turn said that CME’s key competitive advantage was content and that consolidation of all content assets in CME would help it optimise its overall costs, improve the quality of its products, leverage its local talent resources and create new revenue streams. "With the recent investment from Time Warner and the integration of MediaPro Entertainment we have made significant progress in our strategy to become a highly profitable vertically integrated media company."
CME intends to integrate its existing fiction, reality and entertainment television production units with MediaPro Entertainment to create a dedicated content division consisting of production, services and distribution operations across all of CME’s territories.
CME’s board hired Merrill Lynch to serve as exclusive financial advisor to the Related Party Transactions Committee of the Board of Directors of CME in connection with the transaction, considering Adrian Sarbu is president and chief executive officer of the NASDAQ-listed American group, a position he took today, after having served as the chief operating officer since October 2007 and as president since January 1, 2009.
MediaPro Entertainment is a leading television and film producer and distributor in Romania and other Central and Eastern European markets and owns the Buftea studios, one of the largest studio/production facilities in Central and Eastern Europe.
The integration of MPE will enable the American group to create one of the most powerful content and film distribution, entertainment and reality show divisions in the region, which will serve all television stations in Central and Eastern Europe part of the CME.
In 2008, MediaPro Entertainment generated $95 million consolidated revenues and $13 million EBITDA. MediaPro Entertainment’s contracts with CME accounted for 40% of the business and involved the most successful fiction productions broadcast on the Romanian market by the Pro TV and Acasa channels, which were later bought by other stations in other CME territories.
CME operates several television stations in Central and Eastern Europe (the Czech Republic, Slovakia, Slovenia, Croatia, Bulgaria, Ukraine, Romania), with a market of 97 million viewers. Ronald Lauder is CME’s founder, and controls the company via his preferential shares. The biggest shareholder, 31%, is US giant Time Warner.
In Romania, CME owns 95% in PRO TV, the local leader, with the remaining 5% held by Adrian Sarbu, whose other assets include Ziarul Financiar and Mediafax.
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