Baring Vostok Capital Partners (BVCP)-managed Baring Vostok Private Equity Fund IV has agreed to invest $80 million in exchange for a 10% equity stake in ER-Telecom, the largest Russian regional “triple-play” telecom operator, reported newspaper Vedomosti. The investment valued ER-Telecom at 13 to 16 times annual EBITDA, the newspaper said.
Founded in 2001, ER-Telecom has over 2.4 million cable TV and broadband Internet subscribers. ER-Telecom provides cable TV, broadband Internet access and telephony services to residential and corporate subscribers in 22 Russian cities in the Urals and Siberia regons including in Perm, Samara, Volgograd, Penza, Kazan, Omsk, Novosibirsk, etc.
ER-Telecom reported revenues of 4,672 million Roubles (ca. $156 million) and EBITDA of 1,274 million Roubles (ca. $ 42 million) in 2009. According to IKS Consulting, ER-Telecom held 7% of the Russian broadband Internet subscriber market of 15.7 million at the end of June 2010. ER-Telecom was 95%-owned by Perm Industrial and Financial Group (PFPG) and 5%-owned by the management.