Bertelsmann Partners With Private Equity Groups; Reports Record Revenues, Earnings
March 21, 2007 at 6:18 AM (PT)
BERTELSMANN is joining forces with private equity groups to establish a novel EU 1 billion investment partnership that could herald a newly acquisitive growth phase, according to THE FINANCIAL TIMES.
The family-controlled GERMAN group will contribute up to EU 500 million to the new fund over three to four years, with the remaining equity provided equally by CITIGROUP PRIVATE EQUITY and MORGAN STANLEY PRINCIPAL INVESTMENTS. Although some large media companies have worked with private equity partners for individual deals, the initiative is unusual in setting up a long-term partnership to look for what BERTELSMANN described as "opportunities of significant scale" in media-related businesses.
News of the partnership came as BERTELSMANN reported record revenues and earnings for 2006, with a 16% increase in operating earnings before interest and tax to EU 1.87 billion on sales of EU 19.3 billion, up 7.9%. Net income more than doubled, from EU 1.04 billion to EU 2.42 billion, largely because of the sale of BMG MUSIC PUBLISHING to VIVENDI's UNIVERSAL MUSIC.