May 25, 2018 / 6:23 AM / in 5 months

Poland's Cyfrowy agrees to buy controlling stake in Eleven Sports Network Sp.z o.o

WARSAW (Reuters) - Polish media and telecoms group Cyfrowy Polsat (CPS.WA) said late Thursday it agreed to buy a controlling stake in sports content producer and distributor Eleven Sports Network Sp.z o.o. (ESN) for 38 million euros ($44.48 million).

The deal was signed by Cyfrowy’s unit Telewizja Polsat, a leading Polish private television group, and Eleven Sports Network Ltd. Telewizja Polsat will have a 50 percent stake plus one share in ESN after the deal.

The acquisition is a long-term strategic investment, Cyfrowy said in a statement.

“In the medium term, gaining access to the portfolio of sports rights held by ESN will strengthen the position of the company’s capital group in the increasingly fragmented television market,” it said.

Telewizja Polsat will pay in two parts - 18 million euros within two working days after signing the deal, while the remaining, adjusted by ESN net debt, will be paid within 4 months after the first payment.

If the value of ESN based on the results for 2020 exceeds 80 million euros, Telewizja Polsat will have to pay ESN an additional earn-out payment equal to 25 percent of the surplus of ESN value over the amount of 80 million euros.

Telewizja Polsat will finance the transaction with own funds.

Cyfrowy recently bought a 33 percent stake in Polish telecom operator Netia (NET.WA).

Reporting by Agnieszka Barteczko; Editing by Subhranshu Sahu

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