Primedia explores sale as African media interest grows
Private equity investors in Primedia Group are exploring strategic options for their stakes in the South African broadcaster, driven by its improved performance under CEO Jonathan Procter. With increased operating cash flow, discussions with potential buyers are heating up, spurred by the growing African media market. Primedia, which owns Eyewitness News and the 702 radio channel, aims for a 25% boost in earnings, potentially valuing the company between $350 million and $500 million.
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By Loni Prinsloo
Private equity shareholders of Primedia Group are considering strategic options for their stakes in the South Africa broadcaster, according to people with knowledge of the matter.
The company, owned by EPE Capital Partners Ltd., FirstRand Ltd., Old Mutual Ltd. and the Mineworkers Investment Trust, has turned around under Chief Executive Officer Jonathan Procter, helping boost its valuation, said the people who asked not to be identified because the talks are private. A jump in operating cash flow at Primedia makes it easier for the PE firms to begin discussions with local and international companies, they said.
Interest in broadcasting firms in Africa — home to the youngest and fastest growing population in the world — has been on the rise in tandem with the surging use of mobile phones and declining data prices. France's Canal+ is in the process of acquiring South African broadcaster MultiChoice Group Ltd., in a deal that values the company at $3 billion.
Primedia, the owner of Eyewitness News and the 702 radio channel, is targeting a 25% increase in earnings before interest, taxes, depreciation and amortization to 1 billion rand ($54 million) in the near term, two of the people said. Improving finances at the broadcaster may value the firm at $350 million to $500 million, the people said.
Primedia "attracts interest from international and local investors from time to time," the company said in an emailed response to queries. "These expressions of interest are considered by the board and shareholders, although no process has been announced by the board."
EPE Capital, Rand Merchant Bank, a unit of FirstRand, and Old Mutual Private Equity referred queries to Primedia. Mineworkers Investment didn't respond to requests for comment. The process is still at an early stage and there's no guarantee any deal will go ahead, the people said.
Primedia was founded in 1994 and operates in eight African countries including South Africa, Nigeria and Zimbabwe.
The company recently established a studio-production business that holds the licensing rights to local versions of shows including the Masked Singer and Deal or No Deal.
The company has also started selling content to streaming services such as Netflix and Apple+, and opened a sporting business for advertising and sponsorships as it increasingly pivots the company to becoming more digital focused.
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