The leading Central and Eastern European TV broadcasting company Central European Media Enterprises (CME) acquired the leading blogging business in the Czech Republic, Blog.cz, and its parent company Jyxo for a total of up to $12.5 million in cash from the founder Michal Illich and Centralway Investment AG. The Czech Internet advertising market is expected to reach $188 million in 2008.
Blog.cz has more than 400 thousand active blogs and 2.5 million monthly users. It is operated by the information technology provider Jyxo that offers a proprietary full text search engine, pay-per-click advertising software solutions, blog technology and webmail services to companies in the Czech and Slovak Republics. Jyxo is also active in Hungary.
The company generated revenues of $0.9 million and operating profit of $0.6 million in 2007. The total acquisition consideration is between $10 million and $12.5 million, depending on the achievement of certain operational objectives at the second anniversary of the acquisition.
As part of the deal, Michal Illich will join CME-owned Czech TV channel TV Nova to head technical business development and help the channel enhance its Internet service offering.
The addition of Blog.cz to TV Nova‘s Internet site, Nova.cz, will make it the 3rd most visited portal in the Czech Internet market, behind the market leader Seznam.cz and Warburg Pincus-owned Centrum.cz.
CME operates TV broadcasting networks in six Central and Eastern European countries with an aggregate population of 90 million people. Its television stations are located in Croatia, Czech Republic, Romania, Slovakia, Slovenia and Ukraine. CME is traded on NASDAQ and the Prague Stock Exchange.