Easy as TMT

by This email address is being protected from spam bots, you need Javascript enabled to view it on Sunday, 14 October 2007

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Bright spark: Peter Einstein, ex-CEO of Showtime.

Pick another emerging industry we consider standard today?" asks Brian Pohl, private equity guru and partner in the newly formed Einstein Media Capital Partners. I draw a blank. But he's looking for an answer faster than I have time to formulate one in my mind. "Take railroads," he says in a split second, grinning. "These were built in England, everyone was building a railroad and some of them were 3km long. Over time that all consolidated into three to four operators and the same will happen here."

This might not mean much to the majority of punters out there but Pohl and managing partner and former decade-long CEO of TV network Showtime, Peter Einstein, believe they are onto something almost as big, if not bigger than the railroad revolution. And the Canadian/American combo might not be wrong.

It has all the elements of what we’re going to be doing including due diligence, advisory, raising capital,and principal investment.

EMCP specialises and invests in the Technology, Media & Telecom (TMT) sectors, and advises on both private equity investments and M&A transactions. In media alone in the first six months of 2007, 399 M&A transactions were recorded globally with a value of more than US$76bn, up by 25% on the entire year for 2006.

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And to top it all, Einstein, who started Showtime with 16 people in a warehouse in Jebel Ali in Dubai, believes EMCP is currently the only company of its kind in the region looking to invest in those three sectors.

"My time out here in the last 10 years has seen the sector really grow. I felt the time was right to get involved with lots of different businesses whether on an advising basis, raising capital, and so on," says the entrepreneurial Einstein.

"So I looked further into who was in this space and found that there's really no one focusing specifically on TMT transactions. Internationally there's plenty and in my time I've spoken to many of the large private equity houses outside, many friends during my Showtime days, but they're all looking outside in, they all want to do the big deal, some form of consolidation, or a large M&A transaction. They're only interested in doing deals in the region of a minimum of half a billion dollars," he adds.

Einstein however, says that the big deals are not yet ready to be made in the Gulf or the wider Middle East.

The market, he says, is still too immature. Nevertheless, there is still a vast amount of revenue to be raked in, advice to be handed out and capital to be tapped into with a vast pool of High Net Worth Individuals (HNWIs) eager to invest their petrodollars into media, technology and telecom deals, particularly those sourced and thoroughly examined by two men with over 50 years experience between them.

"Our view of those who only want to do large deals is ‘you're going to sit there and wait a long time' because a) those are rare in any event and b) in this region to get the big guys to merge or do some major transaction takes a lot of effort, and there's a lot of different personalities involved. That will take a long time to happen, if ever," he laughs.

If anyone's got the contacts in medialand it's Einstein. He has 25 years experience with some of the most recognisable brands in the world, starting as a key member of the original team behind the launch of MTV in the early eighties - both in the US and Europe. More than half of his career has been spent at CEO or president level, most recently with Showtime Arabia.

And it seems to have paid off. With a waterside villa for himself and his family on the recently opened Palm Jumeirah, working in media can have its benefits, however, he and his partner Pohl believe that much more can be achieved.

"There are lots of opportunities to do lots of deals between say US$1m and US$100m with companies who want to sell, merge, recapitalise to build a better business or even start-ups," explains Einstein.

"There are lots of people who want to come into the region and start their businesses or open operations for their businesses here but where do they go for capital or advice if they've had no experience out here?

"This is the birth of EMCP, me coming from the media operations business, former CEO of Showtime and Brian with a vast amount of private equity experience."

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