Morgan Stanley have had UCN on the block for a while. I had assumed that the game of prisoners dilemma had put the deal on hold but sources confirmed last week that Sistema/Comstar UTS had paid what is known as a full price (over 12x forward EBITDA - I hear).
Prime Tass (paid subscription) is the only link I can find confirming the deal.
UCN is a collection (motley?) of regional cable operators with 240Mhz cable all, or substantially all, of which needs to be upgraded to provide hi-speed Internet which is where the $$ are today, despite what the website says. They have some interesting cities; Ekaterinburg, Penza and Voronezh. In effect Sistema has paid big bucks for a footprint.
Valuations are out of whack with reality. They assume that the Russian consumer will bail them out of expensive purchases and that management will execute. The first is a safe (ish) bet. The second is a triumph of hope over reality.
The other saving grace is the ludicrous valuations that western money are providing such that $150mn is barely a hole in Comstar's over-stuffed balance sheet.
Update - Here is a link in english.
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28 February 2006
Sistema Acquires United Cable Network ("UCN")
Morgan Stanley have had UCN on the block for a while. I had assumed that the game of prisoners dilemma had put the deal on hold but sources confirmed last week that Sistema/Comstar UTS had paid what is known as a full price (over 12x forward EBITDA - I hear).
Prime Tass (paid subscription) is the only link I can find confirming the deal.
UCN is a collection (motley?) of regional cable operators with 240Mhz cable all, or substantially all, of which needs to be upgraded to provide hi-speed Internet which is where the $$ are today, despite what the website says. They have some interesting cities; Ekaterinburg, Penza and Voronezh. In effect Sistema has paid big bucks for a footprint.
Valuations are out of whack with reality. They assume that the Russian consumer will bail them out of expensive purchases and that management will execute. The first is a safe (ish) bet. The second is a triumph of hope over reality.
The other saving grace is the ludicrous valuations that western money are providing such that $150mn is barely a hole in Comstar's over-stuffed balance sheet.
Update - Here is a link in english.
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