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Spain’s Promotora de Informaciones Prisa to sell 25 pct of Grupo Santillana Ediciones to private equity firm DLJ South American Partners

By Amarendra Bhushan for CEOWORLD Magazine Updated:September 28, 2009

Spanish media group Promotora de Informaciones SA (Prisa) has agreed a deal worth around $362 million to sell 25 percent of its book publishing arm, Grupo Santillana Ediciones, to a Credit Suisse private equity fund DLJ South American Partners.

Santillana, the leading provider of textbooks in Spain and Latin America, is one of Prisa’s most profitable units, contributing steady cash flow amid a drop in advertising revenue that is hitting some of its other businesses. In the first half of 2009, Santillana was Prisa’s best-performing division in terms of revenue growth, with sales rising 6.5% to €271.6 million (€398.4 million); Prisa’s total sales dropped 17% to €1.68 billion during the period.

The fact that Prisa is selling off part of such a lucrative unit shows the extent of its debt woes. The company is struggling with a debt load of €5 billion after an ill-timed expansion spree during boom times. Prisa’s move to sell stakes in key assets to improve its finances comes at a time when the global media industry is facing unprecedented challenges, wsj reported.

South American Partners, meanwhile, is controlled by Credit Suisse’s Alternative Investment arm and targets investment opportunities in Latin America, with a focus on Argentina, Brazil and Chile.

In a meeting with journalists and business leaders Monday, Prisa’s Chief Executive Juan Luis Cebrian said the company as a whole would have sales in excess of EUR3 billion this year. He added the company’s television unit Sogecable, that includes pay satellite TV platform Digital+ and free to air channel Cuatro, has a healthy balance sheet.

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