Providence Equity Partners in race for Big Cinemas buyout

Navis Capital and multiplex firms PVR, Inox and Carnival Cinemas are in talks to acquire a controlling stake in Big Cinemas

Indian multiplex screen space, which is going through a consolidation phase, seems to be attracting private equity (PE) investors big time. The latest development is that US-based Providence Equity Partners has joined the race to acquire Anil Ambani-owned Big Cinemas. Malaysia-based PE fund Navis Capital and multiplex firms PVR, Inox and Carnival Cinemas are already in discussions to acquire a controlling stake in Big Cinemas.

Providence, which is active in the Indian movie space, had recently bought out Star India's stake in home-shopping channel Star CJ Alive, which has a 40 per cent market share in the home-shopping genre, marking the presence of South Korea's CJ Group in India's teleshopping industry. In 2011, Providence had invested Rs 260 crore in satellite-based digital cinema chain UFO Moviez India to acquire a 36 per cent stake. Providence manages $40 billion in assets across 140 companies globally.

In 2008, Providence invested $640 million in Aditya Birla Telecom, a wholly-owned subsidiary of Idea Cellular Ltd, for a 20 per cent stake. It specialises in equity investments in media, communications, education, and informa tion companies.

Mails sent to Providence Equity and Reliance MediaWorks went unanswered.

Big Cinemas' sell-off will be on the lines of the recent transaction under, which Reliance MediaWorks merged its global film and media business with media and entertainment services provider Prime Focus. Although controlling stake will be sold out, Reliance MediaWorks will hold a minority stake in Big Cinemas, sources said.

The film and media services business sell-off to Prime Focus includes studio facilities in Film City, Mumbai, a 30 per cent stake in Hollywood visual effects company Digital Domain, and 100 per cent ownership of Los Angeles-based digital film restoration firm Lowry Digital.

Reliance MediaWorks has been operating under three divisions: film and media services; cinema chain across India and the US, and a television and content production called Big Synergy Media.

Indian multiplex operators have been consolidating since 2012. The latest acquisition took place in July, when Inox acquired Satyam Cineplex for Rs 182 crore. In July, south India-based Carnival Cinemas had acquired Housing Development and Infrastructure's multiplex chain Broadway Cinema for Rs 110 crore.

Fun Cinemas, promoted by E-City Ventures (part of the Essel Group), which operates 87 screens across 17 cities in the country, is in discussions to raise funds for further expansion.

Notably, PVR Group president Pramod Arora recently joined Everstone Capital, which is in talks for a stake in Fun.