MTG selling Trace amid shift away from TV

Stockholm-based Modern Times Group (MTG) is poised to sell its 75% stake in music broadcaster Trace to investment firm TPG Growth for €30m (US$37m) as part of its move away from linear TV.

Olivier Laouchez

The agreement with TPG remains subject to regulatory approval and values 100% of the Trace business at an enterprise value of €40m – around the same amount as when MTG bought into the company in 2014.

Jørgen Madsen Lindemann, MTG’s president and CEO, said Trace, which runs streaming service Trace Play, had been “a global pioneer in Afro-urban entertainment.”

“Trace is a great business that we have enjoyed developing together with its talented management team over the past four years,” he said.

However, he added that MTG’s focus is on “the accelerated digital transformation of our broadcasting businesses and the rapid expansion of our MTGx digital entertainment portfolio.”

MTG has already sold its stake in Russian broadcaster CTC Media following local regulatory changes and offloaded two Hungarian channels to Sony Pictures Television.

Late last year it completed the sale of its free TV broadcasting and production businesses in Ghana and Nigeria, and in October completed a deal to offload its TV businesses in Estonia, Latvia and Lithuania for €115m (US$124m).

The firm has simultaneously been investing in multi-channel networks including Splay and Zoomin.TV and rolling out Viaplay across Eastern Europe.

Jørgen Madsen Lindemann

Trace operates 21 pay TV channels including Trace Urban and Trace Africa as well as radio stations and online services in more than 160 countries, claiming 200 million viewers and listeners.

Olivier Laouchez, co-founder, chairman and CEO at Trace, said by leveraging its “unique assets” and TPG’s “deep experience with ground-breaking entertainment and technology businesses,” the company would “launch episode two of Trace.”

“By partnering with TPG Growth, a global investor known for its ability to grow and scale businesses, we are well-positioned to build on our success and accelerate our transformation into the leading global afro-urban digital entertainment group,” Laouchez said.

Trace was launched in 2003 following the acquisition of the print magazine of the same name and has broadened out its activities considerably since.

It has been acquiring programming such as clothing series The Fashion Hero in November and in September launched a distribution arm.

TPG Growth has more than US$13bn of assets under management and is part of investment giant TPG.