Jagran buys Print Business of Mid-Day for 174 crore

Jagran Prakashan announced an all stock acquisition of the print business of Mid-Day Multimedia today afternoon.

The deal will add nearly Rs. 100 crores or 15% to the topline of Jagran.

Based on the current market price of Rs. 33.50/- for Mid-Day and Rs. 115/- for Jagran, the deal will cost 15.1 million shares to Jagran or Rs. 174 crores worth of new shares. (The swap ratio has been decided as 7 : 2 – i.e. for each 7 fully paid up equity shares of Rs. 10 each of MML, its shareholders will be entitled to 2 fully paid up equity share of Rs.2 each of JPL).

Assuming a net profit margin of 20% in the Print Business, the deal has been done at a earnings multiple of 9x, a substantial discount to most companies (HT Media, DB Corp) in similar business.

It is to be noted that the radio business of Mid-Day, operated through Radio One FM94.3, will remain with the Ansari family of Mid-Day Multimedia Limited. Radio One FM94.3 one, a JV between Midday and BBC, operates in 7 key cities namely Mumbai, Delhi, Kolkata, Chennai, Bangalore, Pune and Ahmedabad. The business generates an annual revenue of Rs. 25-30 crores.

Last month Blackstone announced an investment of Rs. 225 crore in Jagran Media Network Private Ltd, the promoter holding company of Jagran Prakashan Ltd.