Since its IPO in the middle of 2011, AMC Networks (AMCX 3.42%) has pleased its shareholders. Its share price has risen from $35 per share to more than $71.70 per share thanks to significant improvements in its business performance. More value might be created for shareholders with its recently-announced acquisition of Chellomedia, the international content business of Liberty Global (LBTYA 2.21%).

A strategic move to expand the business internationally
The deal comes in at around €750 million, or $1.04 billion, and gives AMC Networks access to 390 million households in 138 countries. In 2012, Chellomedia generated around $514 million in revenue, including revenue from Poland, the Netherlands, Spain and Hungary. Thus, a $1.04 billion acquisition valued Chellomedia at around two times its revenue. 

The acquisition will certainly enhance AMC Networks' scale in the global market. With the deal, the affiliate subscribers of the company will surge from 96 million to around 500 million. Moreover, the deal will also boost international sales to around 25% of the company's total revenue. Greater business diversification also enhances the company's credit profile.

 Josh Sapan, AMC Networks' President and CEO, commented, "This acquisition allows us to secure a large, global platform on which to distribute our increasingly successful original programming through a collection of strong, well-established and well managed assets worldwide." Moreover, the deal will give AMC Networks complete flexibility to put its content on its own channels.

Partnering with DirecTV in Latin America
AMC Networks sees that international markets have great potential for long-term growth and value for the business. Thus, it seeks to expand its business overseas. In the second quarter, the company also made an agreement with DirecTV (DTV.DL) to launch Sundance Channel in Latin America. Partnering with DirecTV in Latin America was a smart move, considering that DirecTV is one of the leading direct broadcast satellite service providers with more than 11 million cumulative subscribers in the region.

With decent performance in Latin America and the U.S. market, and the company's consistent share repurchase program, in the second quarter DirecTV experienced mid to high single-digit revenue and earnings-per-share growth, as well as strong free cash flow growth. Compared to the second quarter of last year, the company's revenue jumped by 7% to $7.7 billion, while its free cash flow grew by nearly 12% to $526 million.

DirecTV has been quite famous for its aggressive share buyback activities. Year-to-date, the company has bought back around 37 million shares for around $2 billion. DirecTV is on track to reach its full year target of $4 billion in share repurchases.

Liberty Global's huge share buyback plan
For Liberty Global, the divestment of Chellomedia could help the company simplify its business and allow it to focus on its core markets, as well as strategic opportunities. Furthermore, the transaction is compelling to the company in terms of both a valuation perspective and a liquidity perspective. AMC Networks and Liberty Global have higher price/sales ratios than the deal valuation assigned to Chellomedia at 3.47 and 2.79, respectively. At two times price/sales, Chellomedia is not expensive in relative terms at a $1.04 billion valuation.

Like DirecTV, Liberty Global will also enhance shareholder value via share repurchases. In the next two years, it plans to complete a $3.5 billion share buyback which represents 11% of its total current market value. 

My Foolish bottom line
The acquisition of Chellomedia will boost AMC Networks' presence in the international market, accelerating the company's efforts to expand its channels and content overseas. Moreover, the deal gives the company strategic diversification, as it makes AMC Networks less reliant on U.S. results. With the potential synergies and international business leverages from the deal, AMC Network could experience strong growth over the long run.