Cosmetic heir Ronald Lauder is selling nearly half his stake in the Eastern European station group he founded, Central European Media Enterprises, to private equity investor Apax Partners.
Apax is paying $190 million in cash for a 49.7% stake in a limited partnership. Deal, expected to close on Friday, will mean Apax controls a 7.8% stake in the Bermuda-based company.
The remaining 50.3% interest in the limited partnership will be owned by Lauder and his family.
Move is in keeping with a stepped-up effort by key equity firms to acquire stakes in media players. Among such high-profile deals were a buyout by several equity firms of SBS Broadcasting in Western Europe, as well as Stateside deals for MGM last year and for Univision, which is still pending.
The CME board has approved the election of Apax’s Christian Stahl and Frank Ehmer as directors.
Lauder said Tuesday that the deal would allow him to diversify his personal portfolio and realize a return on his initial investment in the company.
“Since CME’s initial public offering in 1994, the company has created tremendous value for shareholders. Further, the deal provides CME with a strong financial investor,” Lauder, who is non-executive chairman, said in a statement.
CME chief exec Michael Garin pointed out that “typically, private equity firms seek returns of two to three times their investment. If Apax is able to realize this objective, all investors will realize the same returns for themselves, with no investor advantaged over one another.”
After three years, Apax can sell all or part of its interest in the limited partnership — and Lauder can buy them back.
The partnership will retain a 64.8% voting interest in CME.
CME stock closed up 4% Tuesday at $60.56, at the midpoint of its 52-week trading range of $44.70-$73.
CME, which has been listed on the Nasdaq and the Prague stock exchanges since 1994, owns a dozen networks in six Central and Eastern European countries, including Nova TV in the Czech Republic and Markiza in Slovakia, reaching 82 million people.
Thirty-year-old Apax, which invests in a variety of businesses, also has interests in U.K.-based Hit Entertainment and in Germany’s Kabel Deutschland. Funds under the advice of Apax total $20 billion around the world.