CME is buying 80% of TV2 (a national terrestrial channel started in 4Q07) and of Ring TV (a sports cable channel) in Bulgaria, for USD 172 mil cash (before adjustments). The deal is set to close within two weeks.
This is CME’s first new market entry for three years. CME’s stated target is to achieve Bulgarian market leadership within five years, through the development of local programming and synergies with the Romanian business. TV2 is still in a very early phase of operations. It has 70% technical reach of the country and is one of four national free-to-air channels, one of which is a state-owned channel.
CME is retaining the existing owner, Krassimir Guergov, as a consultant; CME and he both have call (CME; 14%)/put (Guergov; 20%) options over most/all of the remaining 20% from 2013. The Bulgarian TV ad market was USD 168 mil net last year, and CME thinks its CAGR will be 20% over the next four years.