TMT
Cinven has been involved in the TMT sector for over 20 years. We have invested in consumer publishing, B2B media, academic publishing, directories, cable and satellite and have engineered several landmark TMT transactions. Our current portfolio includes Numericable/Completel, the only major cable operator in France, which Cinven created through a succession of six acquisitions; and Ziggo, the Netherlands' largest cable operator, which was also created through a three-way merger orchestrated by Cinven (see the case study below).
This is a time of rapid change in the TMT sector, the consequence of technological progress and the downturn. The convergence of telephony, television and the internet continues to affect consumer behaviour in the telecoms and media sub-sectors.
As consumption habits shift, audiences are fragmenting – a challenge for advertising-driven businesses. In general, telecoms and cable businesses have performed well during the downturn; but in the media sub-sector, advertising has been hit hard, creating difficulties for many companies. Meanwhile, the long-term transition from printed to online media continues to drive change in business models.
TMT acquisition activity has been subdued over the last three years, but nascent economic recovery and the gradual re-opening of debt markets have improved prospects. In telecoms, the most attractive acquisition targets are very large, and this will impose limits in the medium term; but financing for media and technology targets is available and interesting opportunities are beginning to emerge once more.
Selected Investments
B2B magazines and exhibitions, France
Healthcare publisher, France, US
Cable operator and telecommunications provider, France, Benelux
Academic publishing, Netherlands, Germany, US
Directories, Belgium, international
Cable operator, Netherlands
TMT sector experts
David Barker and Brian Linden
As an experienced, active owner of TMT businesses throughout the cycle, Cinven has a great deal to offer.
Our TMT sector team maps the changing TMT landscape and maintains contact with senior TMT entrepreneurs throughout Europe, mainly targeting robust, stable, growing, cash generative companies. As an experienced, active owner of TMT businesses throughout the cycle, Cinven has a great deal to offer.
Case study: Ziggo
Bernard Dijkhuizen, CEO of Ziggo
Ziggo has consolidated its position as the leading cable operator in the Netherlands, providing analogue and digital TV, broadband and telephony to Dutch households and businesses. Following the acquisition of the three companies that formed Ziggo during 2006-07, its revenues and profits have continued to grow, despite the recession. In the year to 31 December 2009, Ziggo's revenues increased 3.4% to €1.3 billion and profits (EBITDA*) rose by 2.8% to €696 million.
Cinven formed the business by acquiring and merging three of the four largest cable operators in the Netherlands: to create a network that passes over half of Dutch households. Our strategy was to create a leading Dutch cable operator with a 'multi-play' offering of digital TV, broadband and telephony, to realise synergies by merging the three companies and to improve the customer experience.
Since the acquisition process that led to the formation of Ziggo began in 2006, the company has performed impressively. Between 2006 and 2009, revenues have grown at a compound annual growth rate (CAGR) of 8.7%; profits (EBITDA*) increased at a CAGR of 11.6% over the same period. Subscriptions have also grown significantly, validating the growth strategy: the total number of subscribed services increased by over 1.7 million from 5.5 million in 2006 to 7.2 million in 2009.
In 2009, Ziggo made substantial investments in its network and introduced new services, including high speed internet and video on demand. Subscriptions to digital TV, telephony and internet services continued to increase, along with sales of 'bundled' packages. The management team launched customer retention and support initiatives and took action to reduce costs and increase efficiency. The post-merger integration process is now substantially complete.
Looking ahead, the market for digital TV in the Netherlands is expected to continue to grow rapidly, and based on its progress to date, Ziggo looks set to be among the main beneficiaries of this long-term growth trend.
* EBITDA: earnings before interest, taxes, depreciation and amortisation
