PVR acquires southern multiplex chain SPI Cinemas
13 August 2018
PVR, the country’s largest multiplex chain, has acquired South India multiplex chain SPI Cinemas for a total of Rs633 crore in a cash deal. The company will also issue 1.6 million shares of PVR constituting about 3.3 per cent of the diluted paid up equity share capital of the company pursuant to the deal.
Under the terms of the acquisition, PVR would acquire 222,711 equity shares of SPI Cinemas constituting 71.7 per cent of the paid up equity share capital of SPI from existing shareholders for Rs 633 crore.
The transaction is expected to close in next 30 days and the merger process is expected to be completed in next 9-12 months.
SPI Cinemas has presence in Tamil Nadu, Telangana, Andhra Pradesh, Karnataka, Kerala and Mumbai. SPI Cinemas has a network of 76 screens (68 operational & eight expected to start operations soon) across 17 properties and 10 cities.
Further the company has a signed pipeline of over 100 screens, which are expected to be rolled out over the next five years.
“The acquisition of SPI Cinemas is of significant strategic value for PVR and will further cement our market leadership position in India. The acquisition will make PVR the undisputed leader in the South Indian market & provide an attractive platform for us to expand in that geography, which currently is highly underpenetrated in terms of multiplexes,” Ajay Bijli, chairman and managing Director, PVR said.
“This transaction is a significant step in helping us achieve our vision of having 1,000 screens by 2020,” he added.
Chennai-based SPI Cinemas has 31 operational screens including Sathyam Cinema, which was established in 1974.
The other roster of brands under which SPI operates cinemas include Escape, Palazzo, The Cinema and S2.
Pursuant to the proposed acquisition, PVR’s total screen count will rise to 706 screens across 152 properties and 60 cities. The acquisition will also propel PVR as the seventh-largest cinema exhibitor in the world in terms of annual admissions at its theatres, which will be in excess of 100 million.
“SPI Cinemas has been revolutionising the movie watching experience for its patrons by consistently bringing in world class technology and innovative offerings. We are excited to now partner with the largest Indian multiplex chain PVR as this combines two proven business models and will create significant value for moviegoers as well as all the stakeholders,” Kiran Reddy of SPI Cinemas said.
EY India was the exclusive financial advisor on the transaction.