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MTG scoops 75% of Trace

Modern Times Group, the international entertainment group, this week announced that it has signed an agreement to acquire 75% of Trace Partners SAS (‘Trace’), the France based youth media brand and global pay-TV channel operator that has distribution agreements with third party network operators in 160 countries worldwide, including all 55 countries in Africa. The stake is being acquired from Citizen Capital, Entrepreneur Venture, NextStage, and company management, for a cash consideration that values 100% of the company at an enterprise value of EUR 40.0 million. Trace management will retain the remaining 25% of the company. Olivier Laouchez, Trace Co-founder, will continue as Chairman and CEO of Trace, and the other members of the senior management team will also continue in their roles.

Trace operates three music TV channels – ‘Trace Urban’, ‘Trace Tropical’ and ‘Trace Africa’ – and the ‘Trace Sports Stars’ sports celebrity lifestyle TV channel. The four Trace channels are localised in 16 different feeds and are available in up to 11 languages.

Trace has generated 23% compound annual net sales growth over the five years to the end of 2013 and reported preliminary net sales of EUR 19.3 million for the full year 2013. Trace generates almost half of its revenues in Africa and other Emerging Markets. The company had 37 million paying subscribers as at the end of December 2013, up from 27 million at the end of 2012, and also generates a growing proportion of its sales from advertising, events, content and brand licensing.

The transaction is subject to regulatory approval by the French media authorities and MTG will consolidate Trace’s results in the Group’s accounts with effect from the closing of the transaction.

Joseph Hundah, Executive Vice President of MTG’s African operations, comments: “Trace is a cool and contemporary entertainment brand, and one of the leading youth brands in Africa. Trace has proven success with different formats around the world. It fits perfectly with what we are doing both in Africa and, more broadly, with both our linear and digital operations, as well as our content production houses. This deal is another key milestone in our international expansion and provides us with footholds from which we can expand even more in Europe, South America, Asia and francophone countries around the world.”

 

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