Satellite service provider SES will be acquiring broadcast and media service firm RR Media. SES intends to merge the operations of RR Media with its platform services group to create a larger global media solution provider. SES will pay all-cash for the acquisition of 100% of the shares of RR Media at a price of $13.291 […]
Satellite service provider SES will be acquiring broadcast and media service firm RR Media. SES intends to merge the operations of RR Media with its platform services group to create a larger global media solution provider.
SES will pay all-cash for the acquisition of 100% of the shares of RR Media at a price of $13.291 (USD) per share.
The acquisition remains subject to regulatory approvals and the approval of the shareholders of RR Media. The transaction is expected to close in Q2 or Q3 2016.
Wilfried Urner, Chief Executive Officer of SES PS, commented: RR Media has successfully developed the capability to manage and deliver premium content effectively, helping its customers to reach a global audience over multiple satellite, cable TV, IPTV, online and mobile platforms. SES, as the largest global platform for video in terms of reach and channels, adds global scale and considerable insights from the successful development of SES PS in Europe.
During RR Medias Q3 2015 earnings release Management had issued 2015 revenue guidance of $140 million to $143 million with adjusted EBITDA in the range of $17.6 million and $20.4 million. Using the midpoint of this guidance, the implied valuation multiples are 1.7x 2015 Revenue and 12.7x 2015 adjusted EBITDA. As part of SESs earnings release for 2015, management indicated the acquisition is anticipated to be earnings accretive in the first year.
RR Media is expected to generate between $160 million and $170 million for the full year 2016. The growth estimates for 2016 are based on recognizing the full contribution of two acquisitions made by RR Media in 2015 for Satlink Communications and Eastern Space Systems (ESS).
Commenting on the announcement, Avi Cohen, Chief Executive Officer of RR Media, said: SES Platform Services is an important industry player with the capabilities to service strong upper tier clients. With the combined infrastructure and industry expertise, the integrated company will have the capability to deliver innovative solutions to top tier clients, emerging markets and global customers. RR Medias growth strategy has focused on top tier client and increasing scale. This deal achieves both of these strategic goals.
