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Major Private Equity Deals in
Greece – An Exception or a Trend?
6th International Venture Capital Forum
Athens, 14 June 2005
Nikos Stathopoulos
BC Partners
Agenda
Profile
Case
Can
of BC Partners
Study: TIM Hellas Leverage Buy-out
there be more LBO transactions in Greece?
BC Partners
 BC
-
-
Partners is one of the largest private equity firms in Europe
The BCEC VIII funds recently raised €5.8bn representing Europe’s
largest LBO fund
The BCEC VII funds have committed capital of €4.3bn
Credibility with sellers and intermediaries for large acquisitions
 Over
-
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Substantial resources
€11bn raised in eight funds
From blue chip pension funds and insurance companies who have
reinvested over 17 years
For equity investments
No geographical or sector constraints
 57
investments to date in acquisitions with an aggregate
transaction value of €33 billion
-
average size: €570m over 17 years
since 1997: €1.2bn
BC Partners
Substantial resources
(€m)
7000
5,800
6000
5000
4,300
4000
3000
2000
1,100
1000
450
144
102
61
BC
EC
II
00
5
00
0
BC
EC
VI
II
2
VI
I2
EC
VI
EC
BC
BC
EC
V
19
19
97
94
91
19
IV
EC
BC
BC
an
d
II
I
BC
19
EC
88
/
I1
19
98
7
89
0
BC Partners
Private equity groups (funds over €2bn)
Europe based
Substantial resources
Size
Investment area
BC Partners
Permira
CVC Capital Partners
Apax Partners
Cinven
Advent International
Charterhouse
Candover
EQT
Terra Firma
€5.8bn
€5.1bn
€4.6bn
€4.4bn *
€4.3bn
€3.0bn
€2.7bn
€2.7bn
€2.0bn
€2.0bn
Europe
Europe
World-wide
World-wide
Europe
World-wide
Europe
Europe
Northern Europe
Europe
US based European funds
KKR
Bain Capital
Hicks Muse Tate & Furst
Carlyle Group
$3.0bn
$2.5bn
$1.6bn
€1.0bn
Europe
Europe
Europe
Europe
* Apax Fund includes €1.5bn for start-up and early stage investments
BC Partners
 Established
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A distinctive approach and ambition
in 1986
Long track record of successful acquisitions
Well established franchise and team across Europe
Independence guarantees discretion and reliability
Excellent reputation
 Our
goal: acquiring and developing large European-based
businesses in partnership with management
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In a wide range of industry sectors
Holding strong competitive positions
With sustainable opportunities for growth and cash generation
… and good defensive characteristics in an economic down cycle
BC Partners
 We
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 In
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A distinctive approach and ambition
facilitate changes in business ownership and direction:
Family successions (Elis, Grohe, Interpump,…)
Divestments by big groups (Nutreco, Neopost, Brembo,
Polyconcept, Galbani…)
Support for growth (Elior, Teknon…)
Public to Private (Grohe, KTM, Mark IV Industries, Sanitec,…)
Privatisations (SEAT)
Exit of financial sponsors (Neopost II, General Healthcare Group,
Baxi,…)
Sector consolidation (Aviagen,…)
partnership with management
High quality relationships
Which often last beyond the time-frame of our investment
BC Partners
A
A distinctive approach and ambition
truly European team
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Hamburg, London, Milan, Paris, Geneva
Equal weight and influence of all offices
40 investment professionals
Managing Partners have been working together for over ten years
on average
Previous experience as CEO’s, strategy consultants or investment
bankers
Staffed with local nationals in each country, with a common
European mind-set
 One
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fund, one team, common values
Deeply rooted in local markets
Joint decision making and mutual support
Cross-border teams
Wide sharing of industrial and financial know-how
Agenda
Profile
Case
Can
of BC Partners
Study: TIM Hellas Leverage Buy-out
there be more LBO transactions in Greece?
Summary overview of TIM Hellas

TIM Hellas was established in 1992 and was the first company in
Greece to be granted a GSM license
 The
Company initially operated under the brand Stet Hellas but
re-branded as TIM Hellas in 2004
 In
1997, TIM Hellas became the pioneer provider of pre-paid
telephony services in Greece
 In
1998, TIM Hellas was listed on NASDAQ and Euronext
Amsterdam thus becoming the first Greek mobile company to be
listed in an international exchange
 The
Company achieved the 1 million subscriber milestone in
1999
 TIM
Hellas was awarded a UMTS license in 2001
Summary overview of TIM Hellas
(Cont’d)
 As
of March 31, 2005 TIM Hellas reported a subscriber base of
2.3mm, of which 65% were pre-paid customers
 At
present TIM Hellas is one of the 4 providers of GSM mobile
services in Greece and one of the 3 operators licensed to
provide UMTS services
 The
GSM and UMTS network covers 98% and 29% respectively
of the Greek population
 The
principle service offering for the Company includes voice,
network access and value added services to both pre-paid and
contract customers
Summary overview of TIM Hellas
Key Data
YE Dec 31 (€mm)
Subscribers (mm)
Post paid (%)
Prepaid (%)
Blended ARPU (€)
Market shares as of Q1 2005
2002A
2.5
31%
69%
2003A
2.4
34%
66%
2004A
2.3
35%
65%
24.4
23.8
27.1
Operating revenues
Growth %
690.3
808.5
17%
829.1
3%
EBITDA
margin %
230.7
33%
275.6
34%
243.6
29%
CAPEX
as % of sales
105.3
15%
137.5
17%
141.3
17%
Q Telecom
8%
Panafon
31%
TIM
HELLAS
21%
Cosmote
40%
TIM Hellas – Transaction Summary
 On
April 4, 2005, Apax Partners and Texas Pacific Group
announced that they had reached a conditional agreement with
Telecom Italia Mobile (“TIM”) to acquire TIM’s 80.87% stake in
the Greek wireless operator TIM Hellas for a firm value of €1.6bn
 The
acquisition values TIM’s stake at an equity value of
€1,114mm
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The offer price is equivalent to a share price of c.€16.4, representing
a premium of 17.6% to TIM Hellas’ average ADR price over the last 6
months
 TIM
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Hellas is a landmark transaction
First leveraged buyout of a European wireless operator
Largest foreign direct acquisition of a Greek company
Largest ever Greek LBO
Overview of TIM Hellas’ trading activity
$
Volume (000s)
23
Price
1,400
Day of announcement,
April 4, 2005
$
20.6
22
20.5
400
Implied offer price: $21.2¹
21
Feb-15: Rumour of
potential sale of
TIM Hellas first
reported in press
20
20.4
20.3
300
20.2
20.1
19
20.0
200
18
17
10:15
11:30
12:45 14:00
15:15
Offer premia
100
16
15
04-Oct-04
9:00
0
02-Nov-04
01-Dec-04
30-Dec-04
28-Jan-05
Source: Datastream, Bloomberg
¹Offer price based on FX rate of €1 = $1.2914
28-Feb-05
29-Mar-05
One day prior:
2.4%
Pre speculation:
9.4%
Average 6 months:
17.6%
Initial Market Reaction
Broker Comments
“We consider the declared intention of the private
equity consortium to offer minorities €16.43 per
share in cash an attractive offer...
The most significant downside risk at this point is
that the tender offer does not complete. On the other
hand, if the tender offer completes, the share price
would rise above our target price.
The transaction implies ...only a 14% and 1%
discount to its peers, respectively (EV/EBITDA ‘05
and P/E ‘05).”
Smith Barney
April 4
“This price is a 2% premium to Friday’s close price
and...we are downgrading our rating to IL/N given
the proximity of the current share price to the
offer.”
Goldman Sachs
April 4
“We anticipate a successful offer and... move our
recommendation to Hold and target price to
USD21.20, based on the offer price.”
DKW
April 4
Press Coverage
“This is considered a positive development, since the
separation of TIM Hellas from decision makers in the
Italian multinational will benefit the company with more
flexibility... It is noted that TIM’s profits and cash flow
will be stronger, by not having to pay annual
management fees to Telecom Italia. Analysts believe
that TIM will not take any actions leading to a price war,
especially if is considering listing to ASE.”
Eleftherotypia, April 5
“This is the first ever Leveraged Buyout agreement in
Greece ...The acquisition means changes in the overall
Greek mobile telecommunications market... Mr.
Kominakis, managing director of TIM Hellas said that
this is also a message of confidence in the Greek
economy and that trust in the company’s management
is a strong motive for further development.”
Kathimerini, April 5
“It signals another exit of an international company
from the Greek market, but at the same time the first
appearance of American private equity funds in Greek
telecommunications market.”
TA NEA, April 5
“It is not even unlikely that the new management
decides to extend operations beyond mobile
telecommunications. This most probably will change the
landscape in Greek telephony.”
Kerdos, April 5
Challenges of executing a large LBO in Greece
 Availability
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Size of the transaction too big to be absorbed by local banks only

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Need for International banks and local banks
Limited number of precedent public to private transaction in the Greek
market

Bank community required education
 Regulatory
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of leverage
approvals
First ever acquisition of Telecom business, in particular transfer of
licence
Cash merger was for the first time ever executed in Greece
Municipality approval needed
 Management
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education
Management team usually not familiar with use of leveraged balancesheet to drive value creation
First transaction where management team is properly incentivised by
equity participation to deliver on the business plan
Agenda
Profile
Case
Can
of BC Partners
Study: TIM Hellas Leverage Buy-out
there be more LBO transactions in Greece?
Can there be more LBO transactions in Greece?
 Need
a willing seller and a willing buyer
 Private
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Significant funds available for European acquisitions
 Greek
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Equity firms are willing buyers of European assets
companies should consider selling to Private Equity firms
Sector experience, relationships
Analytics, lateral thinking
Focus on shareholder value creation: profit growth
Owner/manager mentality
Understanding of equity markets
Experience of acquisitions and divestments