Secuoya and Vertice: two ways of leveraging venture capital

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Integral service around a transaction
BY : Diego GutiérrezOctober Tue, 2013

investment in the media sectorThe media sector has had two names in its own right Redwood and Vertex. Both companies have carried out operations with venture capital that have allowed them to obtain liquidity to fulfil their development plans.

Secuoya: financing from N+1 to grow through acquisitions

In 2012, the exchange-traded fund Dynamia and the prívate equity division of carried out a "Leverage buyo ut" transaction, i.e. a €36M debt buyout for 55% of Secuoya Grupo de Comunicación.

Secuoya's strategy involves participating in the outsourcing or integral management processes of public or private television stations, promoting a concentration process to expand its portfolio of services and clients, and developing the content area.

With this capital injection, Grupo de Comunicación Secuoya has acquired the audiovisual communications agency Vnews a Antena 3 TV 1.4m, with the aim of adding its experience in the management and outsourcing of audiovisual services and expanding its client portfolio in the field of audiovisual communication.
Another transaction carried out since the capital increase was the exchange of Secuoya's 2.3% shares for Secuoya's 80%. New Atlantis. This company specialises in documentaries and high-end entertainment and fiction programmes in 16:9 digital format and high definition, and has joined the rest of Grupo Secuoya's content subsidiaries, such as 2blephil (fiction), Pulse TV (entertainment) and lowercase (branded content).

"Secuoya has taken advantage of the support of private equity to obtain the necessary financing for growth through acquisitions. In this way it is taking advantage of good acquisition opportunities to gain market share and incorporate specialised talent where the group considers strategic, such as content", analyses Diego Gutierrez, a specialist in corporate financing at Abra Invest.

Vertice makes cash to clean up its accounts

Vertice has followed a different strategy with private equity. It has taken advantage of assets that could be of interest to third parties to obtain liquidity and clean up its accounts for this new phase led by Manuel García-Durán and Fernando Abascal.

In 2013 Vértice sold 50% of the shares of Vertice 360 servicios audiovisuales to the private equity firm HIG Capital which thus acquires control of 100%. The total amount of the transaction to acquire control of VSA amounted to some €16M. Specifically, the sale price of this stake amounts to a fixed amount of €1 million and a variable amount equivalent to 5% of the amounts received by HIG as a shareholder of VSA including, for example, dividends or the distribution of free reserves.

"It has been an operation with several agreements that affect the future business of both companies, which must have required a complex negotiation process. VSA and Vértice 360 have signed an agreement whereby VSA will support the management of Vértice 360's film catalogue of more than 2,000 titles. With this agreement, Vértice Cine is guaranteed a minimum revenue volume of 100,000 euros per month until 2021. The fees to be received by VSA as consideration for these services amount to 35% of the operating revenues derived from the contracts signed after the agreement comes into force, as long as the guaranteed minimum is reached", says Diego Gutierrez.

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