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Jagran Prakashan completes acquisition of Radio City
MUMBAI: Jagran Prakashan Ltd (JPL), the publisher of leading Hindi daily ‘Dainik Jagran’, has completed the acquisition of the private FM radio network Radio City.
JPL had received the approval of the Ministry of Information and Broadcasting (MIB) for the takeover on 28 May.
In a board meeting held on 16 December 2014, JPL had approved the entry of the company into the radio space via the acquisition of Music Broadcast Pvt Ltd (MBPL), which operates the Radio City FM brand in 20 stations across seven states.
JPL CMD Mahendra Mohan Gupta said, “We are delighted to announce that Radio City has now become a part of Jagran Prakashan Ltd. This acquisition marks JPL’s foray into the high growth radio industry and catapults the company into a leadership position in the radio segment of the media industry. Over the years, Radio City has successfully established a strong foundation and has delivered strong financial results. In FY15, Radio City has delivered much higher profits than what we considered while pricing. Further, the price paid is at a significant discount to the market leader. Therefore, the acquisition becomes extremely attractive for the company. I am confident that Radio City will continue to generate robust cash flow and add significant value for the shareholders of the company.”
As reported earlier by TelevisionPost.com, JPL has paid Rs 434 crore (Rs 4.34 billion) to acquire MBPL and fellow subsidiary Radio City Connect that provides activations. After the acquisition, Radio City will continue to operate under the leadership of its current management led by CEO Apurva Purohit.
JPL acquired 100 per cent of Radio City through an all-cash deal. JPL had earlier stated that the acquisition would be funded primarily from internal accruals and investments and would not impair the company’s ability to distribute dividends.
The network is present in the top 14 out of 16 ad revenue-generating markets with a focus on SEC AB audiences.
MBPL’s FY15 revenues stood at Rs 209.4 crore, marking a growth of 30 per cent over the previous year. Its operating margins for FY15 were 31 per cent. The profit after tax for FY15 was at Rs 43 crore, up 100 per cent over the previous year.
JPL already owns Radio Mantra, which has presence in eight cities (Jalandhar, Agra, Bareilly, Gorakhpur, Hisar, Karnal, Ranchi, and Varanasi) across UP, Haryana, Punjab and Jharkhand. Interestingly, Radio City does not operate in these eight markets, and going forward, the company will consider consolidating the two businesses.
India Value Fund Advisors (IVFA) acquired a majority stake in MBPL in 2005 and helped it acquire 16 additional licences. It also owns an online radio station PlanetRadioCity.com. Its on-ground division Radio City Connect is engaged in activations including mobile road shows, multi-city mall activities, RWA activities, school/college promotions, rock shows, and movie and music promotions.