One of the biggest entertainment companies PVR Ltd announced that it has successfully acquired South India-based SPI Cinemas Pvt Ltd. The company is looking to expand its operations through acquisitions.
SPI Cinemas has an existence in the key markets of Tamil Nadu, Telangana, Andhra Pradesh, Karnataka, Kerala, and Mumbai. According to the reports, PVR will buy out a 71.7% stake in Chennai-based SPI Cinemas for Rs 633 crore ($91 million) in a cash-cum-stock deal. The company will take over 222,711 equity shares of SPI Cinemas.
Along with this, PVR will also have an option to acquire the remaining stake for up to Rs 300 crore.
“The proposed acquisition is in line with the company’s continual growth and expansion strategy,” said the company.
This deal will be funded by PVR through a combination of internal accruals, new debt issuance, and a deferred consideration of Rs 1 billion. The transaction is expected to be completed within 30 days and the merger is expected to take place in 9 to 12 months.
This agreement will surely help PVR to grow and expand its operations in southern India, where SPI Cinemas has 76 screens across 17 properties in 10 cities. This acquisition will take PVR’s total screens to 706 across 152 properties and 60 cities. With this, PVR will become the 7th largest cinema exhibitor in the world in terms of annual admissions at its theatres.
The company claims to have revenues of Rs 309.6 crore for the financial year 2018 and expects revenues of Rs 410-425 crore in the current financial year.
Prior to this acquisition, PVR has also acquired companies like Cinemax and DT Cinemas in 2012 and 2016, respectively.