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Major equity fund buys Bite for 450 million euros

  • 2007-01-24
  • By TBT staff

SERIOUS ASSETS: Mid Europa Partners' acquisition of a100 percent equity stake in the mobile phone operator Bite is a major coup. The company had to see off some stiff competition.

VILNIUS - A top Central and East European equity fund has purchased Bite, a leading mobile phone operator in Lithuania and Latvia, for 450 million euros. Mid Europa Partners, a private equity fund, bought 100 percent equity stake in Bite's two subsidiaries 's Bite Lietuva and Bite Latvija 's from Denmark's TDC. "We are delighted to acquire this high quality asset in what has been a highly competitive process," Mid Europa partner Craig Butcher said in a statement. "It represents our first investment in both Lithuania and Latvia, the fastest growing economies of the EU, and our fifth investment in mobile GSM."

Bite is the second largest mobile operator in Lithuania in terms of revenue and the third largest operator in Latvia, Mid Europa said, stressing that Bite, with annual revenue growth of 20 percent, was one of the fastest growing mobile firms in Europe.
In the words of Bite CEO Maarten van Engeland, "Bite has experienced rapid growth over the last three years, and we are looking forward to working with Mid Europa to reach our next stage of development."
The competition for the asset was stiff, with several major international players, from as far away as Israel, expressing interest. Several analysts had claimed that by asking 450 million euros TDC was playing aggressive, but in the end the Danish mobile leader got its way.

"Bite is a well-managed and fast-growing company in a very attractive market," Jesper Theill Eriksen, CEO of TDC Mobile International, said in a statement. "However, in accordance with TDC's strategic focus, Bite is considered a financial holding with the purpose to maximize value."
As Eriksen explained, "We feel the time is now right to dispose of Bite to another party to continue its development."
Indeed, the decision to discard Bite surprised many. TDC is a dynamic company, with some 16 million customers worldwide. Earlier this month, the company introduced in Denmark live television on mobile telephones as part of a third generation of mobile services "that will transform the industry," the company said.

According to TDC executives, the decision came after a strategic review of the company's structure of performance.
For its part, Mid Europa said it was committed to develop Bite "via further significant capital expenditures in 3G and HSDPA roll-out in both countries."
High-speed downlink packet assess is a third-generation mobile service for the UMTS network that allows for fast data transfers.
Matthew Strassberg, director of Mid Europa, said: "We have received very strong interest from a number of debt-financing parties interested in supporting, through innovative structures, this investment, which will rank as the largest buyout in the Baltics and among the largest in Central Europe."

In Latvia, where Bite entered the market in September 2005, the provider is hoping to increase its market share from 8 to 13 percent. At the end of last year, Bite had 187,000 clients, according to Engeland.
Bite's data shows that Tele2 leads the market with a 45 percent market share, while LMT has a 41 percent slice. Tele2 announced earlier this month that it has over 1 million clients using its mobile services.
In Lithuania, the mobile market is expected to grow this year by 6 's 7 percent in terms of revenue on improved quality and range of services, including 3G.