Israeli satellite transmissions group RR Media has acquired Romanian content management specialist Eastern Space Systems (ESS) to add scale in Central Europe.
Financial details were not disclosed, although RR Media expects to generate about US$7m of…
Israeli satellite transmissions group RR Media has acquired Romanian content management specialist Eastern Space Systems (ESS) to add scale in Central Europe.
Financial details were not disclosed, although RR Media expects to generate about US$7m of incremental revenue from Central Europe during 2016 as a result of the deal.
RR Media’s CEO Avi Cohen said: “This growing region is underserved, dominated by small companies, and we view it as a prime opportunity to capture market share by leveraging our scale, global presence, and comprehensive offering.
“Accordingly, we are confident we can further penetrate central Europe, gaining new customers and producing increasing revenue opportunities in the coming years.”
Privately held ESS will give RR Media added Intelsat satellite coverage at 1W, serving Central, Eastern and Nordic Europe, as well as a fibre network that will complement its diversified portfolio in the region.
It also gives the group access to several upper tier broadcast customers that have contacts with ESS, including Eurosport, AXN, Paramount, MTV and VH1.
NASDAQ-listed RR Media has been using acquisitions to diversify and grow in recent years as part of a strategy to transform into a global media services provider.
The group was founded in 1981 mainly as a communications provider in Israel. It entered the digital broadcasting sector in 1996, and a year later secured its first international digital customer in a deal with Thai satellite operator Thaicom.
Since then the group has been buying teleports, media centres and content service providers to expand its offering. It rebranded from RRsat to RR Media in February 2015 to reflect this transformation.
RR Media expects to post about US$30.5m in Q1 2015 revenues next month, compared with US$32.8m for Q4 2014. It is also targeting between US$3.5m and US$3.8m in Q1 2015 adjusted EBITDA, compared with US$4.3m for the previous quarter.
Cohen said the group had been hit by the continuous erosion of the Euro exchange rate, which
impacted its dollar-based backlog, as well as the economic instability in Russia.
“We are taking specific steps to address this issue including decreasing relevant satellite capacity commitments and continue to closely monitor the situation in Russia for any further changes,” he said.
The group is due to announce its financial results on 11 May.
