The repositioning of JSE listed media giant Times Media Group (TMG) has gained momentum with the company announcing that it was parting ways with its underperforming cinema business Nu Metro.
TMG announced yesterday a deal in which it will sell, for R75 million, Nu Metro and its associated cinema advertising business Popcorn Cinema Advertising Sales. The operation is sold to Subcocept, a firm backed by private equity player One Fifty Capital.
This is no surprise as the evolving TMG has previously announced intentions to part ways with Nu Metro.
In the most recent annual report TMG CEO Andrew Bonamour declared that “… Nu Metro Cinemas business lacks the required synergies and returns on investment in a media-focused group such as TMG. TMG is currently negotiating the sale of the Nu Metro Cinemas business.”
TMG reiterated this position in yesterday’s announcement.
“As part of TMG’s turnaround strategy, it has specifically decided to exit non-core businesses identified within TMG.”
“One such business is Nu Metro, which falls within the Company’s Entertainment division and which forms the subject matter of the Disposal.
“Nu Metro is the 2nd largest cinema operator in Southern Africa and operates 17 cinema complexes with 162 screens across South Africa and this business represents approximately one third of the cinema market share in South Africa, claiming 4 of the top 10 screens by attendance.”
Popcorn Advertising sells on-screen advertising space on behalf of Nu Metro as well as the major independent cinemas across South Africa, to media agencies and some clients directly.”
TMG added that “The proceeds of the Disposal will be used to reduce acquisition leverage with respect to future acquisitions more aligned to TMG’s core business.”
The group added that “As announced previously TMG has also sold the following Cinema assets:
- 51% shareholding in Monte Cinemas (Pty) Limited to Tsogo Sun Casinos (Pty) Limited for R20 million cash;
- 50% shareholding in Three Groups Cinemas (Pty)
- Limited to Whitehorse Investments (Pty) Limited and Avalon Three Groups Investments (Pty) Limited for R18 million in cash.
“Accordingly the total sale proceeds for the entire TMG cinema assets as described above amounts to R113 million,” said the company.
One Fifty Capital was described as an independent private equity firm providing capital for small to medium start-up enterprises in the property, education, entertainment and gaming industries with offices in KwaZulu-Natal, South Africa and Nicosia, Cyprus.