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Liberty Media Eyeing Univision

The rise of Spanish language media in the United States has been only one consequence of a surging number of Spanish speakers in the country. No Spanish language network has been as successful at capturing this audience than Univision has. But, that does not mean that the business has always been kind to its owners.

Univision last got new ownership in 2007, just before the global economy went into free fall. Saban Capital Group, TPG Capital, Providence Equity Partners, Madison Dearborn Partners, and Thomas H. Lee Partners joined forces than for a $13.7 billion acquisition, no doubt tantalized by the projections of ever increasing Spanish language audiences in the United States. Exiting the investment has proved difficult. Three years ago, the investment group attempted to sell the network to Grupo Televisa, a Mexican production company, for $20 billion, but Televisa balked at the high price.

Univision currently produces about $1.2 billion a year in EBITDA and has $8 billion in debt. Were Univision to be valued similarly to American broadcasters such as CBS (which trades at more than 12x EV/EBITDA), the equity of Univision would be worth $6.5 billion – implying an enterprise value of $14.8 billion.

Among those said to be interested in the property is legendary media investor John Malone as well as Grupo Televisa. Malone and Televisa already have some connections, with three members added to its Board of Directors last year that had ties to Malone. Televisa would be unable to complete the transaction on its own because of regulatory concerns but would make sense as a strategic buyer since Univision is paying Televisa about $300 million a year for content it produces. Televisa already owns 10% of Univision, excluding warrants it holds to purchase an additional 26% of the company.

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