An investor group led by former Viacom CFO Wade Davis has agreed to acquire a 64 percent majority stake in Spanish-language media giant Univision Communications for an undisclosed sum.
The group is made up of private equity firm Searchlight Capital and media- and consumer technology-focused operating and investment company ForgeLight, which Davis launched as CEO in December after leaving Viacom due to its recombination with CBS to form ViacomCBS. Davis is set to run Univision as CEO upon the close of the deal.
Mexican TV giant Televisa has elected to retain its stake of about 36 percent. Financial terms of the deal weren’t disclosed.
Univision emphasized that its program license agreement with Televisa “will remain in effect and will not expire unless Televisa voluntarily sells down a substantial portion of its ownership stake, at which point the agreement would remain in place for an additional seven and a half years.” The agreement, which Univision called one of its “most strategic assets,” provides the company exclusive access to Televisa’s content library, which it says is the largest Spanish-language video library in the world.
The deal, which is subject to “customary closing conditions, including receipt of regulatory approvals,” is expected to close later this year.
“I am honored to be partnering with Televisa and Searchlight to help steward Univision into this next phase. Univision’s leadership and connection with one of the most important audiences in the U.S. today creates an amazing platform to drive innovation, build market-defining content and create an even deeper relationship with its audience,” said Davis. “Vince and the entire Univision team have done an outstanding job of refocusing the company over the past 18 months, which has further enhanced the company’s position as a market leader in Spanish-language media and created this incredible opportunity going forward.”
Vince Sadusky has been running the firm as CEO since Randy Falco retired at the end of 2018. While Univision under Falco had been acquiring English-language assets like the Onion, Lifehacker, Deadspin and Jezebel, under Sadusky, Univision has shed those businesses.
Last summer, Univision said it would entertain offers from potential buyers as part of an exploration of “strategic options” and engaged advisers. It said Tuesday that Morgan Stanley, LionTree Advisors and Moelis & Co. are acting as its financial advisors, with Cravath, Swaine & Moore, Covington & Burling and Sidley Austin serving as legal counsel.
Univision has been privately owned for more than a decade. Its investors, including Saban Capital Group, Madison Dearborn Partners and Providence Equity Partners, have been seeking at least a partial exit for a while and previously considered an initial public offering before market conditions changed their mind.
Univision was hoping an IPO might have valued the company at $20 billion, and it had in 2017 turned down an offer of up to $15 billion from John Malone, who controls Lionsgate, SiriusXM Radio and other media assets.
“Both Searchlight and Wade are wholly supportive of Univision’s core mission to entertain, inform and empower Hispanic America and fully embrace the commitment and special bond we have with our audience,” Sadusky said. “Our talented operating team has transformed Univision to be strategically, operationally and financially stronger than it has been in years.”
“Televisa has a shared history with Univision dating back many years and a deep strategic relationship today,” Davis highlighted. “The context, insight and strategic content that Televisa brings to Univision have been key to the company’s success.” And he touted the acumen of the new investors, saying: “This group of owners will be able to support the incredible team at Univision to deliver even more value to its advertisers, distributors and most importantly, its audience.”
Read Sadusky’s memo to staff below.
Univision Team,
As you know, over the last several months our Board has been reviewing strategic options for the Company. The process has been comprehensive because we have been focused on finding the right path forward. I am excited about today’s news that we have entered into an agreement in which an investment group led by Searchlight Capital Partners and Wade Davis’ ForgeLight will acquire a majority stake in Univision. The firms will partner with Televisa, which will remain a dedicated and important partner to Univision and retain their significant ownership stake.
Searchlight and ForgeLight understand our value and the impact we have on our community. Searchlight is a leading investment firm with a strong track record of investing in, and providing strategic support to, media companies, including Hispanic media. ForgeLight is an operating and investment company focused on the media and technology sectors and Wade is a true media industry veteran — as CFO of Viacom from 2012 to 2019, he has deep experience and a strong track record of success in the media space. Both clearly bring significant media knowledge and resources that will allow us to continue on our strong path forward. As part of the agreement, Wade will assume the role of CEO once the transaction has closed. Until then, I am committed to working closely with the teams to support a smooth and seamless transition.
As I have said to you before, we know that demographic and economic drivers of Hispanic consumers will spur growth in media consumption and spending for years to come, and we have been focused on positioning Univision to best capitalize on this historic opportunity. It is very clear that our new investors strongly admire and appreciate the value of our brand, leading market position and dedicated employee base. Today’s news is a reflection of their belief in Univision and our people.
This positive outcome is in large part thanks to all your hard work. As a team, we have transformed Univision to be strategically, operationally and financially stronger than it has been in years. We have made important moves — strengthened programming, secured many major distribution deals, closed our strongest Upfront in four years, divested non-core assets and enhanced our news, sports, local and digital offerings. Our partnership with Televisa has never been stronger and continues to create an unstoppable, world-class content machine operating at full steam — and that isn’t changing. We are a reenergized and refocused company, and today marks the start of an exciting new chapter. I want you to know that it has been a privilege for me to lead this great Company and to work alongside all of you.
I know you have questions about what this means for you and the future of Univision. Over the coming weeks, we will be sharing more information around our path forward, but in the meantime, it remains business as usual until the transaction has closed. Our goal is to make this transition as seamless as possible, and we will discuss further at our next All Access in the coming weeks.
This is an exciting day for Univision, and I could not be more optimistic about what’s ahead!
Best regards,
Vince
