Europe-based firm acquires Mabuhay Satellite

By Mary Ann LL. Reyes

September 14, 2010

Agila-2 satellite (ABS)Manila - A company backed by the Permira funds, along with the Asia Broadcast Satellite (ABS) management team, has reached an agreement to acquire Kingsbridge Ltd., the holding company for ABS, one of the fastest growing premium satellite operators in the world.

The Permira funds will become the majority shareholder of ABS.

Permira is a private equity firm with a European heritage and a global reach. The firm advises funds with a total committed capital of approximately 20 billion euro ($26 billion). Its funds, raised from pension funds and other institutions, make long-term investments in companies with the ambition of transforming their performance and driving sustainable growth.

ABS completed last July 1 its acquisition of Mabuhay Satellite Corp. (MSC) business and facilities in the Philippines, including Agila2, now renamed as ABS-5.

Founded in 2006 by CEO Thomas Choi, ABS supplies bandwidth connectivity to broadcasting and telecom customers, serving over 80 customers in around 30 countries. ABS currently operates three satellites in orbit under the ABS brand, one under co-brand with a third party and two additional satellites in the pipeline including the new state-of-the-art ABS-2 scheduled to be launched in early 2013.

ABS’ prime orbital locations cover four fifths of the world’s population, targeting high growth markets in Asia, Russia, Africa and the Middle East.

Officials announced that the acquisition of ABS is entirely equity funded. The Permira funds support ABS’ ambition to become a leading satellite operator in its target markets. One of its key near-term initiatives is to build and launch the new ABS-2 satellite, which will be one of the largest fixed service satellites to be launched over the Eastern Hemisphere.

The Permira funds have significant experience in the satellite sector, having previously made successful investments in Inmarsat, a leading provider of global mobile satellite communications services, and Intelsat, the leading provider of fixed satellite services worldwide.

At Inmarsat, the Permira funds backed substantial investment in technology through the financing of the design, launch and manufacture of the I-4 fleet of satellites, the most advanced commercial mobile communications spacecraft of their kind while at Intelsat, the funds facilitated the successful acquisition of Panamsat and the pursuit of new growth opportunities.

Citigroup Venture Capital International Proprietary Investment Partnership L.P. and Citigroup Venture Capital International Co-Investment L.P., which have been the majority shareholders of ABS since 2006, agreed to sell their respective interests in the holding company of ABS, along with ADM Capital and certain other shareholders, subject to the terms and conditions of the share purchase agreement dated September 9, 2010.

Terms of the deal were not disclosed. The acquisition of ABS marks the Permira funds’ third investment in Asia since 2007.

“We are delighted to be working with the Permira funds, one of the world’s most experienced satellite investors. Their team understands the industry and its immense opportunities and shares the management’s growth ambitions. This made them the obvious choice for ABS as we embark on our next stage of development,” Choi said.

For his part, Richard Sanders, head of TMT at Permira, said ABS is one of the world’s fastest growing satellite operators, with prime orbital locations serving markets with strong fundamentals. “Tom Choi and his team have achieved a tremendous amount in the past four years from start-up and, with the Permira funds’ backing, have the opportunity to continue growing in their target markets in Asia, Russia, Africa and the Middle East,” he said.

Meanwhile, Ji Min, managing director and head of Asia for Citi Venture Capital International (CVCI) said: “We had a very positive experience as a majority shareholder of ABS. We applaud the management’s efforts in contributing to the company’s strong growth and in developing good relationships with its customers. We value the close-knit relationship that we were able to form with Tom Choi and his team and are pleased to see the company enter the next phase of growth. We wish them a great future.”

Henry Chen, Head of Permira’s Hong Kong office, added: “This is an example of Permira displaying its competitive edge - combining strong global sector expertise with extensive local reach to capture attractive investments. This is Permira funds’ third investment in Asia and we will continue to focus on attractive opportunities in sectors in which we have deep insight and can bring significant value.”

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