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Anil Ambani-led Reliance Group has acquired a minority stake in Prime Focus Ltd, an animation and entertainment services provider, in a multi-layered deal which will see the former merging its media and entertainment arm Reliance MediaWorks (RMW) with Prime Focus.
Both RMW and the promoters of Prime Focus, Naresh and Namit Malhotra, will invest ₹120 crore each in Prime Focus as part of the transaction.
In the merged entity, Prime Focus will have a 33.5 per cent stake, while RMW will hold 30.2 per cent.
The proceeds of the deal will be used to fund Prime Focus’ recent acquisition of the UK-based film editing studio Double Negative.
The deal will see the creation of a highly integrated media services group with over 5,500 people present across 20 locations offering visual effects, stereo 3D conversion, animation, and cloud-based digital media solutions, the companies aid.
Namit Malhotra will be the Executive Chairman and Global CEO of Prime Focus. “We are 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.
As part of the transaction, the India and overseas business of RMW’s film and media services business, which has shown a significant turnaround in the last few quarters, will be combined with Prime Focus through a slump sale.
The net consideration will be paid in the form of fresh equity shares of Prime Focus valued at ₹52 apiece.
Open offer
The promoters of Prime Focus and RMW also announced the mandatory open offer in Prime Focus, to the extent of 26 per cent of the fully diluted share capital, at ₹52 apiece , in compliance with SEBI rules.
The combination will result in the immediate extension of Prime Focus’ infrastructure across India, the UK and North America.
EY India was the exclusive adviser to RMW for the transaction, and Centrum Capital was the adviser to Prime Focus.
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