Primedia’s private equity shareholders mull exit
Primedia targeting a 25% increase in earnings
Interest in broadcasting firms in Africa has been on the rise in tandem with the surging use of mobile phones and declining data prices.
Private equity shareholders of Primedia Group are considering strategic options for their stakes in the South Africa broadcaster, according to people with knowledge of the matter.The company, owned by EPE Capital Partners, FirstRand, Old Mutual and the Mineworkers Investment Trust, has turned around under CEO Jonathan Procter, helping boost its valuation, said the people who asked not to be identified because the talks are private.
A jump in operating cash flow at Primedia makes it easier for the PE firms to begin discussions with local and international companies, they said.
Interest in broadcasting firms in Africa – home to the youngest and fastest growing population in the world – has been on the rise in tandem with the surging use of mobile phones and declining data prices.
Interest
France’s Canal+ is in the process of acquiring South African broadcaster MultiChoice Group, in a deal that values the company at US$3 billion.
Primedia, the owner of Eyewitness News and the 702 radio channel, is targeting a 25% increase in earnings before interest, taxes, depreciation and amortisation to R1 billion (US$54 million) in the near term, two of the people said.
Improving finances at the broadcaster may value the firm at US$350 million to US$500 million, the people said.
Primedia “attracts interest from international and local investors from time to time,” the company said in an emailed response to queries. “These expressions of interest are considered by the board and shareholders, although no process has been announced by the board.”
Expansion
EPE Capital and Old Mutual Private Equity referred queries to Primedia. Rand Merchant Bank, a unit of FirstRand, and Mineworkers Investment didn’t respond to requests for comment. The process is still at an early stage and there’s no guarantee any deal will go ahead, the people said.
Primedia was founded in 1994 and operates in eight African countries, including South Africa, Nigeria and Zimbabwe.
The company recently established a studio-production business that holds the licensing rights to local versions of shows including the Masked Singer and Deal or No Deal.
The company has also started selling content to streaming services such as Netflix and Apple and opened a sporting business for advertising and sponsorships as it increasingly pivots the company to becoming more digital-focused.
-Bloomberg