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KKR and CA Media’s $300 mn media platform could mean big-ticket deals; Rajesh Kamat and Paul Aiello to co-head

MUMBAI: For Asian media and entertainment companies hunting for cash to fund their ventures, this is a piece of good news. A fund to the tune of $300 million, governed by global investment firm KKR and The Chernin Group, will be available for their consumption.

What’s more, CA Media Group COO Rajesh Kamat will jointly head it along with Group CEO Paul Aiello. Kamat has wide experience in the Indian market and, prior to joining Peter Chernin’s CA Media in 2011, he was group COO of Viacom18 and CEO of Colors.

KKR logoWith a corpus of $300 million, Indian media and entertainment companies are expecting big-ticket deals. CA Media has already made a string of purchases but they have been smaller in size. The biggest has been a 49 per cent stake in production house Endemol India (now Endemol Shine India). The other investments include character entertainment company Graphic India, OML (Only Much Louder), and Fluence, an online influencer network around celebrities and brands.

The deal size will range from $15 million-$75 million. “There will be deal opportunities across the spectrum. Digital media companies are launching by the dozen and growing fast. Amid digitisation, Indian cable TV companies are looking for funding support but it remains to be seen if the new fund has an appetite for a sector that is in a stage of transition. There are very few options in the TV broadcasting space. OTT is also a growing space and requires capital infusion. With Phase III expansion, FM radio companies would need oodles of cash. What strategy the fund follows in India will be interesting to watch,” a media analyst said.

Emrald_MediaThe pan-Asia media and investment platform is called Emerald Media. KKR and The Chernin Group have announced a multi-faceted partnership that includes the creation of Emerald Media, a new vehicle to fund investments capitalising on fast-growing opportunities in the media and entertainment industries across Asia.

KKR has committed up to $300 million to the Emerald Media platform from its KKR Asian Fund II and The Chernin Group will join as a minority co-investor. KKR has also acquired a significant, minority stake in CA Media, the existing Asian media portfolio of The Chernin Group.

Emerald Media will focus primarily on providing growth capital ranging from $15 million-$75 million for both control and significant minority positions to media, entertainment, and digital media businesses in Asia.

Rajesh KamatWhile Kamat and Aiello will co-head Emerald Media, they will be joined by an experienced team of operating executives.

Emerald Media will have offices in Mumbai, Hong Kong, and Singapore. Kamat and Aiello will continue to manage the CA Media platform, which includes assets in India and in Indonesia.

Kamat and Aiello together have over 30 years of experience in the media and entertainment industries in Asia. They bring a unique blend of operational and investment acumen to their business approach. Aiello is the current Group CEO of CA Media, the former CEO of News Corp.’s Star TV Asia, and former Head of TMT investment banking at Morgan Stanley Asia.

KKR member and KKR Asia managing partner Joseph Y Bae said, “The growing middle class in the region is using its discretionary income on Internet connectivity, but the industry itself is fragmented. Investing behind proven leaders in industries with high growth potential and partnering with them to grow their business is a cornerstone of KKR’s Asia strategy. We look forward to working with experienced media leaders Rajesh and Paul in this dynamic sector.”

KKR member and KKR India CEO Sanjay Nayar added, “The media, entertainment and digital media segment across Asia especially in India enjoys attractive macro fundamentals, mirroring the trajectory of the region’s consumer sector. This is a fragmented industry, and we are excited to work with industry veterans to identify the next generation of media and entertainment companies we can partner with and support.”

TCG_LogoThe Chernin Group chairman and CEO Peter Chernin noted, “This partnership provides TCG and its fellow investors in CA Media with a unique opportunity to continue to work with a best in class management team and leading global investors at KKR in Asia.”

“The media and entertainment sector is on the cusp of a strong growth phase—driven by media convergence, an attractive investment environment, and rising discretionary spends. With the building blocks for growth in place, there is a significant opportunity to create a diversified portfolio of assets in this space, building on our accomplishments and ongoing work with CA Media and The Chernin Group,” added Kamat.

Aiello further added, “With the Asia media industry experiencing rapid and transformational changes driven by digitization and growing internet and mobile penetration, Emerald Media will invest across mediums, demographics, and revenue models to continue driving such transformation.”

Aiello and Kamat have so far supported smaller outfits where they have used their past operational roles to expand the businesses. Will they now go for bigger media companies? Only time will tell.