Music Broadcast enters Kolkata market with the acquisition of Friends 91.9 FM
MUMBAI: Music Broadcast Limited (MBL), the owner of Radio City, has acquired the radio division of Ananda Offset Private by way of slump sale. The company runs an FM radio station ‘Friends 91.9 FM’.
MBL will pay a cash consideration Rs 35 crore minus net external debt plus/minus differential of normalized working capital adjustment of Rs 9.24 crore.
The transaction allows MBL to enter the Kolkata market which is one of the top 5 markets in the country. The company said that Friends FM is an established brand for the last 10 years. Kolkata was not available at the time of Phase III bidding process.
The focus is to tap the large potential from national advertisers. MBL has had a sales alliance with AOPL since the last 5 years
The transaction is expected to be value accretive and help in improving the EBITDA margins.
Under the terms of the agreement, MBL will acquire 100% ownership of the radio division of AOPL, subject to the ministry of information and broadcasting’s (MIB) approval. The transaction is by way of slump sale on a going concern basis.
AOPL runs two business divisions, radio and offset division. The radio division holds a channel licence in Kolkata under the brand name “Friends 91.9 FM” which it had acquired under the Phase II regime and is operational since 2007. The offset division carries out printing of daily newspapers, periodicals, news magazines and other periodicals in heat set web offset printing machines.
AOPL’s revenue in H1 FY18 was Rs 5.83 crore while EBITDA and EBITDA margin stood at Rs 1.19 crore and 20% respectively. In FY17, the EBITDA and revenue stood at Rs 1.99 crore and Rs 10.8 crore.
Commenting on the results, MBL director Apurva Purohit said, “We are happy to announce that the board today approved the acquisition of the radio division of Ananda Offset Private Limited (AOPL). This acquisition gives us access in the Kolkata market which is considered as one of the top 5 markets in the country which was earlier not present in our bouquet. I am very confident that the coming together of strong and established brand like ‘Friends FM’, the high-quality local team it has and our national footprint across all key cities in India will give us several opportunities to create EPS accretive synergies.”