Reliance Group, one of India's leading business houses, and Prime Focus (PFL), a global media and entertainment industry services leader, today announced the combination of the global film & media services business of Reliance MediaWorks' (RMW) with PFL.
RMW and the promoters of Prime Focus, Naresh and Namit Malhotra, will each infuse fresh equity capital of Rs 1.20 bilion into Prime Focus at Rs 52 a share, through a preferential allotment, aggregating Rs 2.40 billion. The equity proceeds will be used to fund the recent merger of double negative with PFW.
As part of the transaction, the India and overseas operations of RMW's Film and Media Services business, which has shown a significant turnaround towards profitability in the last few quarters, will be combined with PFL through a slump sale.
The net consideration will be paid in the form of fresh equity shares of PFL valued at Rs 52 a share. Post the preferential allotment and the business combination as above, the fully diluted shareholding of the promoters of PFL will be 33.5%, while RMW will be at 30.2%.
The promoters of PFL and RMW simultaneously also announced the mandatory open offer in Prime Focus, to the extent of 26% of the fully diluted share capital of PFL, at Rs 52 a share.
The combination will result in the immediate extension of Prime Focus' infrastructure across India, UK and North America. EY India was the exclusive Advisor to Reliance MediaWorks for the transaction, and Centrum Capital was the exclusive Advisor to Prime Focus.
''We are hugely excited about the transformational growth opportunity created by the powerful combination of the global film and media services business of Reliance MediaWorks and Prime Focus,'' said Amitabh Jhunjhunwala, group managing director, Reliance Group. ''Namit is an enormously passionate leader, who has created and run a highly successful global media services business. We are delighted to have the opportunity to support PFL as the Company moves to the next orbit of growth under Namit's dynamic and 'turbo-charged' leadership'', he added.
''This is a very exciting time in the life of Prime Focus,'' said Namit Malhotra, founder, Prime Focus and executive chairman & group CEO, Prime Focus Group. ''From being able to partner the world's finest visual effects provider Double Negative, to having the Reliance Group come on board, to help mobilize our strategy in building the bridge between the West and the East. I am very confident about the benefits this combination brings to all our customers, employees and stakeholders worldwide.''
Shares of the company declined Rs 0.15, or 0.27%, to settle at Rs 54.65. The total volume of shares traded was 1,701,053 at the BSE (Wednesday).