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Reliance MediaWorks acquires 30 per cent stake in Prime Focus
By: Ludo Date: July 3, 2014, 4:44 pm
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That's another news !
HTML http://www.indiantelevision.com/television/production-house/post-production/reliance-mediaworks-acquires-30-per-cent-stake-in-prime-focus-140702
MUMBAI: After its mega announcement a few days ago about Prime
Focus World merging with Double Negative to create the world’s
largest independent, VFX, stereo conversion and animation
company, one of the Ambani brothers has decided to step into the
game as well.
Anil Ambani owned Reliance MediaWorks has bought shares in Prime
Focus and merged itself with Prime Focus. The trio will now be
the world’s largest and most integrated media services group
with over 5500 people across 20 locations offering services such
as visual effects, stereo 3D conversion, animation and
cloud-based digital media solutions that transcend the film,
advertising and television industries.
An announcement by the two companies to the BSE states that “the
combination brings instant benefits to global clients, with new
levels of creativity, technology innovation, truly integrated
digital media services, unmatched scale, financial stability and
sustainability.”
The new group will also have the world’s first hybrid
cloud-enabled media enterprise resource planning. This unique
platform virtualises the content supply chain and helps
broadcasters, studios, brands, sports and digital businesses
manage their business of content by driving creative enablement,
enhancing ecosystem efficiencies and sustainability, reducing
costs and realising new monetisation opportunities.
Reliance MediaWorks and the promoters of Prime Focus, Naresh and
Namit Malhotra will each infuse fresh equity capital of Rs 120
crore into Prime Focus at Rs 52 per share through a preferential
allotment, aggregating Rs 240 crore. The equity process will
also be used to fund the merger of Prime Focus and Double
Negative.
The India and overseas operations of Reliance MediaWorks’ film
and media services business will be combined with Prime Focus
through a slump sale which means transferring of the whole or
part of a business undertaking that is capable of carrying out
operations independently for a lump sum consideration without
assigning values to individual assets and liabilities. After
that, the net consideration will be paid in the form of fresh
equity shares of Prime Focus valued at the same share price.
Once the preferential allotment and business combination is
done, the shareholding of the Prime Focus’ promoters will come
down from 41.48 per cent to 33.5 per cent and Reliance
MediaWorks will be 30.2 per cent. The mandatory open offer in
Prime Focus has also been announced to the extent of 26 per cent
of the fully diluted share capital of Prime Focus at Rs 52 per
share as well.
Through this combination, Prime Focus’ will get access to one
million square feet of facilities in Film City, Mumbai, 30 per
cent stake in Hollywood VFX house- Digital Domain and 100 per
cent ownership of LA based digital film restoration firm Lowry
Digital.
Reliance Capital states that it wants to primarily focus on its
financial services and align its noncore investments with
successful entrepreneurs.
Namit Malhotra will be the executive chairman and global CEO of
Prime Focus Group. Says he, “This is a very exciting time in the
life of Prime Focus. From being able to partner the world’s
finest visual effects provider Double Negative, to having the
Reliance Group come on board, to help mobilise our strategy in
building the bridge between the west and the east. I am very
confident about the benefits this combination brings to all our
customers, employees and stakeholders worldwide.”
Speaking on the deal, Reliance Group group managing director
Amitabh Jhunjhunwala said, “We are hugely excited about the
transformational growth opportunity created by the powerful
combination of the global film and media services business of
Reliance MediaWorks and Prime Focus. Namit is an enormously
passionate leader, who has created and run a highly successful
global media services business. We are delighted to have the
opportunity to support Prime Focus as the company moves to the
next orbit of growth under Namit’s dynamic and ‘turbo-charged’
leadership.”
Reliance MediaWorks CEO Venkatesh Roddam said that this was a
natural and synergistic combination to optimise resources. “We
are very pleased to combine our global film and media services
business with Prime Focus. This will create enhanced value and
new opportunities for all stakeholders, including customers in
India and overseas and our dedicated team of people.”
Commenting on the new media house creation, Reliance Capital CEO
Sam Ghosh said, “The proposed transaction reflects a significant
step forward in Reliance Capital's strategy of unlocking value
from its investments in sectors other than financial services.
We intend to partner and align ourselves with successful
entrepreneurs like Namit Malhotra of Prime Focus, who has
established high growth businesses, and we will support them in
their endeavours to attain global leadership and excellence in
their chosen areas of core expertise. This strategy will free up
management bandwidth and resources in Reliance Capital,
enabling us to singularly focus on, and further accelerate
growth in, our core business of asset management, life and
non-life insurance, broking and distribution, commercial
finance and related sectors in financial services.”
Similar discussions are underway in relation to unlocking of
value from other investments made by Reliance Capital in areas
outside financial services, and further announcements will be
made at the appropriate stage.
Some of the works handled by the trio include: The Dark Knight
Trilogy, Transformers 4, Inception, Gravity, Harry Potter and
Avatar. The deal between Reliance MediaWorks and Prime Focus
brings integrated services to the Bollywood industry from
equipment rental and shooting stages up to final digital
distribution.
EY India was the exclusive advisor to Reliance MediaWorks for
the transaction and Centrum Capital was the exclusive advisor to
Prime Focus. The transaction is expected to go on for a couple
of weeks.
Reliance MediaWorks and Prime Focus’s wholly owned company
Monsoon Studio has taken 2,30,76,923 equity shares. 6,73,07,692
shares will be given via the open offer.
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