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East Capital Explorer AB: ECEX to sell Starman Group to Providence Equity

- Cash consideration at least EUR 81m

East Capital Explorer AB (publ) ("ECEX") has reached an agreement in
principle to pursue a sale of its entire 63 percent stake in Starman
Group, the pan-Baltic cable TV and broadband provider, to Providence
Equity. The transaction, which will result in an exit gain for ECEX
of at least EUR 35m, corresponding to a gross IRR in excess of 30
percent, will consist of an upfront cash consideration of
approximately EUR 81m with the potential for an additional earn-out
of up to EUR 5m payable in 2017. The transaction will represent an
implied total enterprise value of approximately EUR 210m.

East Capital Explorer acquired a majority stake in the Estonian
operator Starman in 2013. Since then, Starman's revenues and EBITDA
have grown by an average of 11 percent per year. In February 2015,
East Capital Explorer made an add-on investment in Starman which
enabled Starman to acquire its Lithuanian peer Cgates, thereby
creating the first pan-Baltic cable TV and broadband provider. The
two equity investments amounted to a total of EUR 46m.

Mia Jurke, CEO of East Capital Explorer, commented: "This transaction
will crystallize significant value for our shareholders, and prove
our past three years' strategic focus on investments in private
equity and real estate in the Baltic countries. We welcome the
financial flexibility that this transaction will give us. We believe
that our strategic investment focus and a continued use of available
tools such as buybacks, dividends and share redemptions, can
altogether increase shareholder value."

Kestutis Sasnauskas, Head of Private Equity and Real Estate at East
Capital, said: "I am pleased to announce this, which will be one of
the largest private equity transactions in the Baltics to date. We
have strengthened investments in technology, product development and
market consolidation, and worked closely together with the management
team. This has enabled Starman to outgrow its competitors and
transform from a national challenger into a regional leader. We are
confident that Providence will enable Starman to continue to develop
successfully in this exciting and fast evolving market."

Aivo Adamson, CEO of Starman Group, said: "Starman has in recent years
intensively focused on growth and expansion in our Baltic home
market, supported by East Capital Explorer. We are committed to
offering our clients innovative and superior telecom and
entertainment solutions. We are confident that with the addition of a
strong financial investor, with over 25 years of experience of
telecom investments, as our new majority owner, we can continue on
the path of innovation and growth in the Baltic region."

Karim Tabet, Managing Director at Providence, said: "The acquisition
of Starman Group would represent Providence's continued commitment to
investing in infrastructure to support the delivery of high quality
media and communication services in the Baltic region." Robert Sudo,
Managing Director at Providence, added; "We look forward to
supporting the company's strategy to improve customer experience and
provide access to best-in-class services and content."

The transaction will provide East Capital Explorer with an annualized
return (IRR), net of all fees (management fees, carried interest and
transaction costs), of between 24 and 27 percent. The exit gain will
result in a carried interest of approximately EUR 6.5m, equal to 20
percent of the net exit gain based on the upfront consideration,
according to the investment agreement between East Capital and ECEX.
The amount will be treated as a liability in ECEX's balance sheet as
of Q1 2016. Payment of the carried interest will, however, be subject
to a number of conditions as described under section "Fees" in East
Capital Explorer's latest financial report. The net positive effect
on ECEX' NAV will be approximately EUR 3m, over the recorded fair
value of Starman of EUR 72m.

The earn-out will be based on the success of ongoing strategic
projects as well as achieved EBITDA targets during 2016 and will, if
the conditions are met, be received in 2017 following the approval of
the audited annual accounts of Starman.

Terms and conditions

The minority shareholders in Starman will be offered by Providence to
sell their shares to Providence on the same terms and conditions
offered to ECEX. The minority shareholders have a pre-emptive right,
which allows them to purchase ECEX' shares at the same terms and
conditions proposed to ECEX. If the minority shareholders do not
exercise this pre-emptive right or otherwise agree to sell their
shares to Providence, they will be obliged to sell their shares to
the buyer under existing "drag-along" provisions. The transaction
will be subject to local competition and regulatory approval as well
as minority shareholders not exercising their pre-emptive rights, and
is expected to close during Q2 2016. A break fee will be payable if,
in certain circumstances, the transaction does not close. The
transaction agreement will include representations and warranties
that are customary for a transaction of this nature.

About Starman

Starman is the leading TV and internet provider in the Baltics.
Founded in 1992, Starman has been a technology pioneer and innovator
in the Estonian telecommunication sector, developing the first
broadband services, most advanced digital TV services and unique TV
Everywhere solutions. In 2015, Starman expanded its reach to
Lithuania through the acquisition of Cgates. Today, the group offers
cable TV, broadband, DTT and fixed-telephony services with over 500
thousand RGUs across Estonia and Lithuania. Starman has approximately
500 employees and is headquartered in Tallinn.

About East Capital Explorer

East Capital Explorer AB (publ) is a Swedish investment company with a
Net Asset Value of EUR 254m, created with the aim of bringing unique
investment opportunities in Eastern Europe to a broader investor
base. The company makes direct investments into primarily private
companies and real estate, but has also invested through East
Capital's alternative investment funds. East Capital Explorer's main
investment theme is domestic growth and the Company targets fast
growing sectors such as retail, telecom and real estate. East Capital
Explorer is listed on Nasdaq Stockholm, Mid Cap.

About Providence

Providence is a premier, global asset management firm with $45 billion
in assets under management across complementary private equity and
credit businesses. Providence pioneered a sector-focused approach to
private equity investing with the vision that a dedicated team of
industry experts could build exceptional companies of enduring value.
Since the firm's inception in 1989, Providence has invested in more
than 150 companies and is the leading equity investment firm focused
on the media, communications, education and information industries.
Providence is headquartered in Providence, RI and also has offices in
New York, London, Hong Kong, Singapore and New Delhi. Visit for more information.

Contact information

East Capital Explorer:

Mia Jurke, CEO, East Capital Explorer, +46 8 505 885 32

Lena Krauss, CFO and Head of Investor Relations, East Capital
Explorer, +46 73 988 44 66

Providence Equity:

Jonathan Doorley/Conrad Harrington, Sard Verbinnen & Co, +44 (0)20
3178 8914

This information is disclosed in accordance with the Securities
Markets Act, the Financial Instruments Trading Act and demands made
in the exchange rules. It was released for publication at 15:00 CET
on 14 March 2016.


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