 "Fun Republic")
After the backing out of private equity (PE) major Everstone Capital from talks to acquire Fun Republic, it's now the turn of Mexican multiplex giant Cinepolis.
Sources say Cinepolis is in advanced talks with the management of Fun Republic for a buyout. It is learnt a term sheet (a preliminary to a final agreement) has been signed.
Fun Cinemas, promoted by E-City Ventures (part of the Essel Group), currently operates 87 screens across 17 cities in India. The group also has a single screen division that is run under the name E-City Digital Cinema. Fun Republic currently operates four lifestyle malls, in Mumbai, Chandigarh, Lucknow and Coimbatore. Atul Goel, son of Laxmi Goel, younger brother of Subhash Chandra, runs E-City Ventures as managing director.
| EXPANSION PLANS |
|
According to sources, the deal size could be about Rs 300 crore. E-City Ventures is keen for 15 times the Ebitda (earnings before interest, taxes, depreciation and amortisation) as valuation against the industry standard of eight to nine times, sources said. PE firm Everstone, which had signed a term sheet and is in advanced talks with Fun, had backed out last month. The reason is not known.
Mails sent to the spokesperson of Cinepolis and to Atul Goel did not elicit any response till the time of going to press.
Cinepolis currently operates at Ahmedabad, Amritsar, Bangalore, Bhopal, Hubli, Jaipur, Ludhiana, Mangalore, Mumbai, Patna, Pune, Surat and Thane. It has 18 screens in Gujarat. According to reports, the multiplex chain, which runs about 100 screens in India, plans to invest around Rs 1,200 crore to increase the screen count to 400 by 2017. Cinepolis plans to expand its presence in all big cities, and in the National Capital Region. And, add screens in tier-II and tier-III cities.
Founded in 1971, Mexico-based Cinepolis began operations in India in 2009, at Amritsar. Currently, it is the world's fourth-largest movie theatre circuit and operates 3,500 screens in 11 countries. From being the 15th operator at the time of entry, Cinepolis has grown to fifth-largest multiplex entity in India. Cinepolis is also the worldwide pioneer of the first luxury cinema concept, Cinepolis VIP, launched in 1999.
Strong consolidation has been seen in the Indian multiplex sector since 2012. The latest acquisition was in July, when INOX Leisure acquired Delhi-headquartered Satyam Cineplexes for Rs 182 crore. In July, South India-based Carnival Cinemas had acquired HDIL's multiplex chain, Broadway Cinema, for Rs 110 crore. Another deal in the market is Reliance's Big Cinemas, where PE majors and multiplex ones such as PVR, INOX and Carnival Cinemas are in discussions.
