New Delhi : Multiplex chain PVR on Sunday said it is acquiring 71.69 per cent stake in South India-based SPI Cinemas for about Rs 633 crore in an all cash deal.
It said that the company’s board has also approved the issuance of 1.6 million shares of PVR for the residual stake. PVR said that the board has approved the execution of a Share Purchase Agreement (SPA) in this regard. The acquisition involves buying of SPI’s 61.65 per cent from SS Theatres and 10.04 per cent equity from S V Swaroop Reddy, it said. The proposed acquisition is in line with the PVR’s continual growth and expansion strategy, it said.
“Such inorganic growth will enable the company to expand its presence in South India and make a mark on the film exhibition industry there. “The acquisition of 71.69 per cent stake in SPI will be for a cash consideration of about Rs 633 crore,” PVR said.
The boards of both the companies have approved merger.
PVR CMD Ajay Bijli said: “The acquisition of SPI Cinemas is of significant strategic value for PVR and will further cement our market leadership position in India.
He said the acquisition will make PVR the undisputed leader in the South Indian market & provide an attractive platform “for us to expand in that geography, which currently is highly underpenetrated in terms of multiplexes… This transaction is a significant step in helping us achieve our vision of having 1000 screens by 2020”. Post the transaction, PVR will have 706 screens operational across the country and the company said this acquisition will make it the number 1 operator in top 3 cities of South India — Chennai, Bangalore, and Hyderabad.