Commercial and technical due diligence on the acquisition of a cable and DTH operator in Eastern Europe

The problem

A private equity firm hoped to acquire SBB/Telemach, a multi-country cable and DTH operator in Eastern Europe. SBB/Telemach operates in three core markets: Serbia, Bosnia-Herzegovina and Slovenia. It also has DTH operations in Croatia, Montenegro and Macedonia.

We were engaged to conduct buy-side due diligence of the target by country, including both commercial and technical analysis. We provided support both in the initial review for the first round bid and in the subsequent, more detailed review for the final round bid. We had access to the data room, in addition to attending on-site management meetings and site visits.

The solution

We undertook a full market and competitive review, involving analysis of service price trends, content comparison and cross-platform competition. We conducted extensive analysis on the impact of multi-play on the company’s revenue generating units (RGUs) and service pricing. We also completed a regulatory review to understand the impact that potential new regulation would have on the business. We developed new analytical approaches, breaking down contributing factors and studying causality in trends

We undertook a detailed technical review of existing networks, platforms and systems, including comparison with competing network technologies, key risks and network evolution requirements. Finally, we carried out a full business plan review, considering – for each business line – revenue and cost items, including sensitivity analysis and a comprehensive capex analysis.

The result

Our client successfully acquired SBB/Telemach, using our reports and analysis to value the business.