Satellite fleet operator SES has announced plans to acquire Israeli digital media services firm RR Media for an enterprise value of US$242m.
Satellite fleet operator SES (EPA:SESG) has announced plans to acquire Israeli digital media services firm RR Media (NASDAQ:RRM) for an enterprise value of US$242m.
The deal, being funded through existing financial resources, will combine 100% of RR Media with SES Platform Services (SES PS), a wholly owned subsidiary of the Luxembourg-based group.
They expect to close the US$13.291 per share transaction, representing a 52% premium to the closing price yesterday, in Q2 or Q3 of 2016, subject to regulatory approvals.
RR Media has been building scale and broadening its portfolio over the last two years through acquiring teleports, media centres and content service providers. Its need for scale comes as larger players such as SES increasingly move into the services market to offer more value-added products.
Avi Cohen, RR Media’s CEO, told SatelliteFinance in an interview earlier this month how moving into the market posed a “great challenge” for satellite operators, which need to develop new services to keep up with the evolving industry and change the way they engage with broadcast and media customers.
Announcing its sale today, Cohen said: “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 Media’s growth strategy has focused on top tier client and increasing scale. This deal achieves both of these strategic goals.”
RR Media was founded in 1981 as a communications provider in Israel. It entered the digital broadcasting sector in 1996 and, after securing its first international digital customer in a deal with Thai satellite operator Thaicom, set off on its M&A strategy to expand its offering. It rebranded from RRsat to RR Media in late 2014 to reflect this transformation, and in June 2015 bought local rival Satlink Communications for US$19m in its largest acquisition to date.
Before its sale, the group had been understood to be eyeing ways to double the size of its broadcast business. It currently services more than 1,000 media companies across the world, and provides coverage for over 95% of the world’s population across multi-platform TV and Video-on-Demand, as well as delivering content to online video and DTH services.
RR Media’s largest shareholders, Viola A.V. RRsat, Limited Partnership, Del-Ta Engineering Equipment and Rapac Communication & Infrastructure – which collectively own a stake of about 62.6% – have agreed to back the deal.
Ferdinand Kayser, chairman of SES PS, said: “This is an exciting acquisition and an important milestone in the execution of SES’s differentiated strategy focused on Globalisation, Verticalisation and Dematuring.
“The addition of RR Media further accelerates the globalisation of SES’s services businesses, establishing a world-leading next generation video and media service provider.”
SES PS broadcasts more than 300 channels via satellite, cable and the internet, as well as thousands of hours of video content delivered to video-on-demand platforms.
