South Africa’s media giant Times Media Group (TMG), formerly Avusa, announced today what could be a game changing deal, a R144 million acquisition in Ghana, following years of struggling to come up with a compelling growth strategy.
TMG said it has acquired 32.26% stake in Multimedia Group of Ghana but also exposed that it has an eye on the massive Nigerian market and the broader West African region. Ghana alone is emerging into an attractive market after its economy was jolted into high growth by the discovery of oil reserves. Broader expectations of rising incomes across the sub Saharan region has sparked a scramble for commercial opportunities. Famous Brands, South Africa’s chain restaurants giant, capped this scramble this week with an announcement of a bold venture into Nigeria.
The TMG/Ghana deal could be reflecting the agility of new TMG major shareholder, Blackstar. The London originated investment holding entity with listing on the JSE seems to have brought to TMG superb deal making skills. Blackstar directors, Andrew Bonamour, now seats as TMG CEO.
TMG said “Ghana represents an attractive investment destination and over the medium-term its future is secure. Its stable political environment offers strong growth prospects and a springboard into a much larger West African market with a current population of 250 million”.
The Ghanaian operation, Multimedia, is described as diverse media entity mixing radio, television and web platforms. The housing of these three media categories suggest that Multimedia harbours ambitions of running an integrated operation, a feat which has eluded many across the globe. TMG is clearly hoping to plug in its media assets into this integration story.
TMG runs a portfolio featuring a long list of print media assets including Sunday Times, Sowetan, Business Day and Financial Mail. The company recently refurbished its business focused television channel Summit TV which is now called Business Day TV. It has also created a centralized web news operation.
The TMG announcement described Multimedia as the largest independent media company in Ghana. Established in 1995, the business runs with six of radio stations, three on-line media sites, a multi-channel satellite television service and a marketing and events management business. “Its television channels also offer access into the broader West African market, particularly Nigeria”.
The TMG statement said Multimedia launched its free-to-air television platform in 2009 thus gaining exposure onto lucrative market. “The Ghanaian television market has seen massive growth over the past four years, and to date MultiTV has sold 1,2 million set top boxes”.
TMG noted that most of the growth in MultiTV was funded with expensive debt which has strained the cash flows of Multimedia, hampering its ability to grow. “TMG’s capital investment will be used to retire all of Multimedia’s debt, leaving the business in a powerful position to deliver further growth in television and sustainable profitability”.
It added that the television is still in the building phase and is making losses. “Its television business is well positioned for anticipated regional growth in the television consumer and advertising market and to improve its existing market share”.
About radio, the TMG announcement said Multimedia is well established Ghanaian radio market. It has the largest market share, is profitable and cash flow positive,
The list of affected brands is as follows:
– Joy FM – the largest English language radio station targeting middle to upper income listeners. Joy is by far the leading station for on-air promotions in the country;
– Adom Radio – Akan language station based in Tema with a talk and music format;
– Luv FM – located in Ghana’s second largest commercial city, Kumasi and targets middle to upper income listeners;
– Nhyira FM – Akan language station based in Kumasi which targets middle to mass market listeners;
– Hitz FM – music and entertainment station based on Accra which targets the youth market;
– Asempa FM – 24 hour all talk station – Akan language station in Accra which targets the mass market;
– MultiTV – a nationwide free-to-air television platform in Ghana operating five core owned and managed channels and carrying other third party channels on its set top boxes. The core channels include Joy News, Joy TV, Cine Afrik, 4kids and a local language channel Adom;
– www.myjoyonline.com – web-based news, also streams content from radio and television stations; and
– MultiMedia Events – the largest event organiser in Ghana.
TMG said MultiMedia has an impressive and entrepreneurial management team and is majority-owned and managed by its founder.
TMG added the acquisition suits its African growth strategy which includes taking strategic stakes in quality media companies.
“TMG also offers the opportunity for world class editorial, production and channel training to Multimedia.
The Acquisition therefore represents a significant opportunity to realise TMG’s strategy of geographical and format diversification as well as harness its existing content and management expertise.
“In order to monetise the content that TMG owns and represents, TMG needs further channels to market across the media spectrum including radio, TV and internet. Multimedia allows TMG to access a different medium in a different market”.