univision

Private Equity Funds Behind Univision Set for $1 Billion IPO

by

March 12, 2015

One of the fastest growing major broadcasters in the US is poised to launch its initial public offering (IPO) later this year, according to reports. The Spanish-language broadcaster Univision is backed by big private equity firms, including TPG Capital and Madison Dearborn Partners.

 

Reuters broke the news exclusively on late Tuesday evening. According to its report, the IPO could take place as late as second half of the year, with the IPO expected to raise over $1 billion. This would mean the company is valued around $20 billion, including debt. Reuters’ sources did not wish to be named and at a time of writing, there has been no official comment from any of the parties nvolved.

 

Private Equity Gets Involved
The Spanish-language media company started out in 1955 in San Antonio, Texas. It quickly grew in the 1960s by acquiring other Spanish-language stations across the US. In 1986, the company changed its official name to Univision and established itself as a major network. Private equity firms, including TPG Capital and Madison Dearborn Partners, got involved in 2007 in a deal worth $12.3 billion. On top of the private equity firms, Mexico-based media company Grupo Televisa is among the major shareholders with an 8% stake in the company.

 

According to the reports, Grupo Televisa has been buying Univision debt, which could see it claim a 30% stake in the company. Grupo Televisa has three board members and collects licencing revenue and royalties from Univision.

 

Breakdown of Previous Sale Talks
Univision was reportedly in talks with CBS Corp and Time Warner over a possible sale last year. But it seems the company is now edging towards an IPO. Private investors behind the company have long been looking for an exit and the timing couldn’t be better.

 

Univision’s revenue increased by 10.6% last year and stood at $2.91 billion at the end of the year. Although the company has $9 billion of debt, its balance sheet has been improving. Furthermore, the LA Times believes the upcoming presidential elections in 2016 offer a perfect opportunity for an IPO. The presidential cycle “is expected to produce a bounty of campaign cash for Univision as politicians attempt to woo Latino voters,” the newspaper writes.

 

The biggest question mark now seems to be the reason for Andrew Hobson’s exit. Mr Hobson was Univision’s chief financial officer and his announcement to step down just last month looks a bit more questionable in the light of the IPO development.

 

Three Banks Looking at the Options
The Reuters report announced that three investment banks are looking at the options. Goldman Sachs Group, Morgan Stanley and Deutsche Bank form the team behind Univision’s IPO plan. The plan is to consider an offering of less than 50% of the company’s share on the New York Stock Exchange.

 

If the IPO were to go ahead, it would be among the biggest listings on Wall Street this year. It would also provide a lucrative exit for many of the private equity firms involved with the company.

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