Eutelsat

Activity
Satellite operator
Acquired
Dec 2004
Realised
Dec 2006
Sector
TMT

Business
Acquired in December 2004 for €4.4 billion, Eutelsat is one of the world’s leading fixed satellite operators, with 23 satellites providing coverage for Europe and into North and South America and Asia. The core business focus is on video services, which provide the most stable revenue source in the sector with many broadcast contracts lasting the life of the satellite.

Eutelsat’s satellites are positioned in strategically attractive orbital locations, such as the “Hot Bird” position at 13° East which serves 100 million homes across Europe and broadcasts more channels than any other satellite neighbourhood in the world. Supply is scarce at these locations so pricing is at a premium and barriers to entry are high.

In 2004 it generated revenues of over €737 million and EBITDA of almost €576 million.

Strategy
Our objective was to reform internal governance to bring the shareholder group together, creating a single, coherent buyout, and then relever in a more efficient capital structure.

We also exploited/utilised the development of high-definition television, generating increased demand for transponder capacity.

Outcome
The business developed significantly with the successful deployment of two new satellites in 2006 and a major contract extension with Sky Italia.

Recapitalisation in April 2005 allowed €175m to be returned to Cinven and in December 2005 the business was successfully floated on the Paris Bourse. Cinven’s stake in Eutelsat was sold in December 2006, achieving a multiple of 4.6 on the original investment.