INSUBCONTINENT EXCLUSIVE:
crore.
In a cash and stock deal PVR will acquire SPI Cinemas, which operates brands like Sathyam Cinemas, Escape, Palazzo, The Cinema and
S2, in key markets of Tamil Nadu, Telangana, Andhra Pradesh, Karnataka, Kerala, and Mumbai.
SPI Cinemas has a network of 76 screens (68
operational and 8 expected to commence operations soon) across 17 properties and 10 cities
The company also has a signed pipeline of over 100 screens which are expected to be rolled out over the next 5 years.
Under the terms of the
proposed acquisition, PVR would acquire 71.7% stake in SPI Cinemas from existing shareholders for a total consideration of Rs 633 crore, and
will issue 1.6 million new equity shares of PVR, constituting approximately 3.3% of the diluted paid up equity share capital of the company
At current share price of Rs 1,317 per share, PVR will issue new shares worth over 210 crore.
EY India, the leading firm for media
transactions in India, was the exclusive financial advisor on the transaction.
ET had first reported on January 12, 2015 that PVR and SPI
Cinemas are in talks and the deal size could be around Rs 750-800 crore
The acquisition will also propel PVR as the 7th largest cinema exhibitor in the world in terms of annual admissions at its theatres, which
will be in excess of 100 million.
SPI Cinemas, PVR said, has the highest occupancies across all organised multiplex chains in the country
and is expected to achieve annual admissions of approx
16-17 million in FY19 and revenues of Rs 410- 420 crore
SPI is also one of the key movie distributors in the state of Tamil Nadu.
Kiran M Reddy and Swaroop Reddy, owners of SPI Cinemas, will
continue to remain associated with the business and provide strategic guidance in integrating the business with PVR and create value for all
the stakeholders, the two companies said.
The transaction is expected to be closed in next 30 days and the merger process is expected to be
undisputed leader in the South Indian market and provide an attractive platform to expand in that geography, which currently is highly
