ZEEL calls off deal to acquire 9X Media
MUMBAI: Media conglomerate ZEEL has called off its deal with music broadcaster 9X Media due to non-completion of certain material conditions precedent.
On 6 October 2017, ZEEL had entered into a definitive agreement to acquire 9X Media and INX Music from New Silk Route and other shareholders for an all cash consideration of Rs 160 crore.
“This is further to our communication dated October 6, 2017, providing relevant details of the proposed acquisition of 100% equity stake in 2 Media entities viz. 9X Media Private Limited and INX Music Private Limited (9X entities),” ZEEL said in a filing to the BSE.
“In this regard, we wish to inform you that the said acquisition deal has been terminated/ called-off by the Company inter alia due to non-completion of certain material Conditions Precedent.”
9X Media, along with its subsidiaries, operates a bouquet of six music channels – 9XM (Latest Bollywood), 9X Jalwa (Evergreen Hindi), 9X Jhakaas (Marathi), 9X Tashan (Punjabi), 9XO (English), 9X Bajao (Hindi Classics).
The company operates its Punjabi music channel 9X Tashan through a joint venture. Sandeep Bansal, who grew up as a cable TV operator, has a 34% stake in the JV. With ZEEL taking over the entire business, the JV will get dismantled.
As reported earlier, ZEEL was to acquire 91.45 million shares of Rs 10 each of 9X Media for a total consideration of Rs 155.2 crore. Further, the company had also agreed to acquire 29.15% stake in INX Music for Rs 4.8 crore.
Post the acquisition, INX Music would have become a subsidiary of the company since 9X Media holds 70.85% stake in the company.
The acquisition was expected to be completed in 60 days as no government approvals were required.
9X Media and INX Music had reported consolidated revenue of Rs 158.6 crore in FY17 on a negative EBITDA of Rs 5.1 crore.
In FY16, the consolidated EBITDA was Rs 11.7 crore while the revenue was Rs 176.2 crore. In FY15, the companies had reported EBITDA loss of Rs 10.4 crore on revenue of Rs 148 crore.
The deal would have provided an exit to private equity firm New Silk Route (NSR) which owns close to 80% stake in 9X Media.