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Bringing years of speculation to an end, India’s largest theatre chain PVR on Sunday announced that it is acquiring Chennai-based SPI Cinemas in a cash-cum-stock deal valued at over ₹850 crore.
Under the terms of the proposed acquisition, PVR will acquire a 71.7 per cent stake in SPI Cinemas, a significant player in South India, for ₹633 crore and issue 1.6 million equity shares of PVR constituting 3.3 per cent of the diluted paid-up equity share capital of the company valued at around ₹212 crore.
With a network of 76 screens (68 operational and eight expected to commence shortly) across 17 properties in 10 cities, SPI expects to roll out 100 more screens over the next five years. Among its key properties is Chennai’s Sathyam.
Post acquisition, PVR’s total screen count will increase to 706 screens across 152 properties in 60 cities, making it the seventh largest cinema exhibitor in the world in terms of annual admission at its theatres, which will exceed 100 million.
Post deal, PVR will have 235 screens in the South.
A PVR press release said both Kiran Reddy and Swaroop Reddy of SPI Cinemas will continue to remain associated with the business and provide strategic guidance in integrating it with PVR to create value for all the stakeholders.
“The acquisition will make PVR the undisputed leader in the South Indian market and provided an attractive platform for us to expand in that geography, which currently is highly under-penetrated in terms of multiplexes,” said Ajay Bijli, CMD of PVR.
SPI is one of the largest cinemas exhibition player in South India with presence in key markets of Tamil Nadu, Telangana, Andhra Pradesh, Karnataka, Kerala and Mumbai.
“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,” said Kiran Reddy, CEO, SPI Cinemas.
PVR ’s earlier bid to takeover SPI in 2015 had failed due to valuation issues.
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