Carnival Group has signed the largest overseas acquisition deal for any Indian multiplex.
The Srikant Bhasi-owned media company which runs one of the largest multiplex chains, Carnival Cinemas, has entered into a definitive agreement with Elan Group to acquire its 100% stake in Qatar-headquartered Novo Cinemas.
Bhasi, chairman and founder of the Carnival Group and Abdulaziz Nasser Al Khalifa, group chairman, Elan Group, signed the deal in Doha on Thursday.
While the financial details were not disclosed, sources say the deal is pegged between Rs 500-690 crore ($75-100 million).
Ernst Young was the exclusive financial advisor on the transaction. Eversheds Sutherland and Hadef Partners were the legal advisor to Elan Group and Carnival Group, respectively.
Novo Cinemas currently operates 104 screens with over 16,000 seats across 10 properties in the United Arab Emirates and Bahrain, and has planned expansions of over 50 additional screens over the next few years.
We are the fastest growing multiplex chain in India and Singapore and are strengthening our foothold globally. Our international expansion is a necessity for us at a cultural level, said Bhasi.
We are now entering into Middle Eastern countries with this deal to explore new market opportunities. The relevance of big-screen experience still remains undeniable in any country and we will adopt our learnings from this acquisition in other markets further enhance customer experience.
The transaction is subject to applicable regulatory and statutory approvals and customary closing conditions.
Earlier, Carnival, a late entrant to the multiplex business in India, had taken over the operations of Maharashtra-based E-Square Cinemas 37 existing operational screens with an understanding for upcoming properties too.
Carnival has built its business model on the back of acquisitions. While it started with a 4-screen theatre in Kochi, it grew aggressively after acquiring Anil Ambanis Big Cinemas, HDILs Broadway and Network 18's Glitz Cinemas.
Carnival has set an ambitious target of 1,000 screens in India by 2020. Currently, it has presence in 120 cities across 20 states in India with 162 properties, 470 screens and total seating capacity of more than 150,000.
In August 2016, Carnival made its first international expansion by entering the Singapore market. It had acquired an old property, Bombay Talkies, which had closed down after local banks had begun winding up proceedings against the property. Later in 2017, it acquired two new properties in Singapore - Rex Mackenzie (three screens with 700 seats) and Rex Golden Mile (1 screen with over 1,000 seats) for Singapore $3 million (about Rs 14 crore). Currently it operates 8 screens in Singapore.