PVR Ltd, India’s largest and most premium multiplex chain announced its acquisition of SPI Cinemas Private Ltd, one of the largest cinema exhibition player in South India with its presence in key markets of Tamil Nadu, Telangana, Andhra Pradesh, Karnataka, Kerala and Mumbai.
SPI Cinemas has a network of 76 screens (68 operational & 8 expected to commence operations soon) across 17 properties & 10 cities currently. Further, the company has a signed pipeline of over 100 screens which are expected to be rolled out over the next 5 years. SPI Cinemas bags the first on the list in Chennai with 31 operational screens including the iconic Sathyam Cinema, which was established in 1974 and is a household name in the local market. The other roaster of brands under which SPI operates cinemas include Escape, Palazzo, The Cinema and S2. The company has the highest occupancies across all organised multiplex chains in the country and is expected to achieve annual admissions of approx. 16-17mn. In FY19 and revenues of approx. INR 4.1- 4.2 bn. SPI is also one of the key movie distributors in the state of Tamil Nadu.
Pursuant to the proposed acquisition, PVR’s total screen count will now increase to a booming 706 screens across 152 properties and 60 cities. The acquisition will also propel PVR as the 7th largest cinema exhibitor in the world in terms of annual admissions at its theatres, which will be in excess of 100 million. Under the terms of the proposed acquisition, PVR would acquire 222,711 equity shares of SPI Cinemas constituting 71.7 % of the paid up equity share capital of SPI from existing shareholders for a total consideration of INR 633 crores and issue 1.6 mn equity shares of PVR Limited constituting~3.3% of the diluted paid up equity share capital of the company pursuant to a scheme of amalgamation between SPI and PVR. Both Kiran M Reddy andSwaroop Reddy will continue to remain associated with the business and provide strategic guidance in integrating the business with PVR and create value for all the stakeholders. The merger process is expected to be completed in next
9-12 months.
Commenting on the transaction Ajay Bijli, Chairman cum Managing Director, PVR Ltd said:
“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 and provide an attractive platform for us to expand in that geography, which currently is highly underpenetrated in terms of multiplexes. Both Kiran and Swaroop have done a tremendous job in building some of the best cinemas in the country and I look forward to their continued partnership with PVR as we take the business to the next level. This transaction is a significant step in helping us achieve our vision of having 1000 screens by 2020”. Commenting on the transaction Kiran Reddy of SPI Cinemas said: “SPI Cinemas has been revolutionizing 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.