Israeli satellite transmissions business RRSat Global Communications has acquired London-based content management services company JCA for up to US$13m in cash.
Under the terms of the transaction, RRSat will pay an initial US$9m for JCA’s parent…
Israeli satellite transmissions business RRSat Global Communications has acquired London-based content management services company JCA for up to US$13m in cash.
Under the terms of the transaction, RRSat will pay an initial US$9m for JCA’s parent company TVP Group. An additional US$4.5m earn-out will then be payable based on JCA achieving certain performance targets over the next three years.
RRsat will fund the acquisition through cash on hand as well as the expected operating cash flow of the acquired entity. RRsat expects the acquisition to be accretive within the first full operational quarter post acquisition, which is anticipated in Q4 2013.
The company stated that the acquisition was part of its strategy of expanding globally through establishing a local presence, in this case Europe.
Avi Cohen, RRsat CEO, commented: “This acquisition and the formation of RRsat Europe Ltd. are important milestones in the implementation of our strategy to become a global company with local presence, closer to our clients.
“There are two major aspects to our business: content management and content distribution. While the content distribution aspect involves our state-of-the-art facilities in the US and Israel, content preparation and management requires a local presence working closely with our customers. The addition of JCA’s sophisticated local operation in London will enable RRsat to leverage local talent and provide services specifically for content preparation and content management to customers in Europe.”
The deal is similar to RRSat’s acquisition of US-based sports distribution business SM2 in November 2012, which significantly expanded its presence in North America. And earlier this year, RRSat opened an office in Moscow, to augment its access to customers in Russia and the CIS.
Since it was acquired by TVP Group in 2004, JCA has grown by more than 400% and reported revenues of just under US$10m in 2012. In addition, RRsat said that the London-based company’s gross margins and profit margins were consistently higher than its own.
