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News
Ericsson Media solutions in private equity deal
Ericsson has concluded its major review of its broadcast and media solutions businesses. Having separated broadcast into Red Bee Media – which remains an Ericsson company after attempts to find buyers – it is offloading 51 % of Media Solutions to One Equity with all assets and employees moving across to a new entity.
In the review, Ericsson said it evaluated different opportunities for both units, including partnerships, divestments, and a continued inhouse development, based on what generates the best long-term value for Ericsson.
The Ericsson unit had seen a number of acquisitions, including Tandberg Television and the Microsoft Mediaroom IPTV middleware operation. It completed its acquisition of Red Bee Media from Creative Broadcast Services Holdings – an entity controlled by Macquarie Advanced Investment Partners in May 2014. Red Bee Media was formerly BBC Broadcast Limited. BBC Broadcast was created by the BBC in 2002, by placing a range of BBC channel creation and channel management services under one roof.
Ericsson announced in November 2017 that it was renaming its Broadcast and Media Services business to its former Red Bee Media name.
“ It is apparent that Ericsson is struggling to sell off this asset,” commented Paolo Pescatore, VP, multiplay and media, CCS Insight at the time.“ Many of its rivals are struggling
in light of the challenging and competitive landscape. Therefore’ private equity could be the only realistic and viable option. However, strategically, content is proving to be a key battleground for all telcos which represents a significant step towards offering a suite of connected and smart home services. With this in mind, Ericsson was undoubtedly bringing together a strong suite of assets in TV. Moving forward, we expect to see rivals such as Huawei and Nokia place more focus on this area as a means of differentiating their offerings beyond connectivity.”
“ Media Solutions and Red Bee Media are leading providers of media products and services, and with the performance improvements that are currently being implemented, we see future upsides to both businesses,” claimed Börje Ekholm( above right), president and CEO, Ericsson.“ We are confident that the direction we announce today will enable us to create the best longterm value, for both our customers and our shareholders.”
Ericsson has partnered with One Equity Partners, a private equity firm with deep expertise in media and telecom investments, to further develop Media Solutions. Ericsson will retain 49 % of the shares in the company. This structure is designed to establish Media Solutions as a leading independent video technology company with strong and committed financial support driving continued investment in innovation and growth. The terms of the transaction are confidential. Closing of the transaction is expected in Q3 2018 and is subject to customary closing conditions, including regulatory approvals.
Ericsson will continue to develop Red Bee Media as an independent and focused media services business, with the execution of the performance improvement and legal separation activities, initiated in 2017, as top priorities.
“ Red Bee Media is already today a leading broadcast and media service provider, with a strong customer base among the top tier broadcasters and service providers,” commented Steve Nylund, CEO, Red Bee Media.“ Our focus is now on improving and transforming Red Bee Media, in partnership with our customers, to enable our full potential as an independent and focused media services business.”
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RTL acquires United Screens MPN
The RTL Group has acquired United Screens, the leading multi-platform network( MPN) in the Nordic countries.
The investment sees the RTL Group expand its footprint as the leading European media company in online video. Since its foundation in late 2013, United Screens has shown excellent growth. Based on a hand-picked premium selection from many of the best video creators in the Nordics, and an award-winning sales team, United Screens has developed state-of-the-art branded content campaign capabilities. As a result, branded content represents 50 % of United Screens’ total
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revenue. The acquisition complements RTL Group’ s existing MPN portfolio, which includes Los Angeles-based StyleHaul, Berlin-based Divimove and Vancouverbased BroadbandTV.
“ This acquisition is another step in accelerating our‘ Total Video’ strategy, as United Screens strengthens our MPN presence in Europe,”
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commented RTL Group CEO Bert Habets( left), who has become chairman of the board of United Screens following the transaction.“ With our highly popular creators and leading market positions in each territory, RTL Group is the only European company to offer advertisers pan-European digital video campaigns in premium and brand-safe environments.”
“ We, at United Screens, are proud and excited to now be a part of RTL Group, a global leader in online video,” declared Malte Andreasson, co-founder and CEO of United Screens.“ This allows us to accelerate our strategy and grow our presence in the Nordics. At United Screens, we will continue striving for the
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best for our creators, partners and clients. We are happy that RTL Group shares our high ambitions for the future, and we will aim for an even stronger position in the Nordic media market.”
United Screens generates over 500m million video views a month on YouTube and represents hundreds of influencers in music, lifestyle and entertainment across all social media platforms.
The purchase agreement provides for a price of SEK 120 million(€ 12.4 million) on a debt and cash-free basis subject to usual post-closing adjustments. Additionally, RTL Group plans to invest SEK 25 million(€ 2.6 million) to fund the company’ s growth plan across the Nordic region.
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10 EUROMEDIA |
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