TIMES Media Group, owners of the Sunday Times and Business Day, has invested about R195m in acquiring a 49% stake in Kenya’s Radio Africa Limited (RAG), a deal that gives the company exposure to television, radio and newspaper assets in East Africa’s largest economy.
Times Media CEO Andrew Bonamour said the Kenyan deal was funded through cash resources and that the company still had more available and an appetite to do more deals in Africa. "We now have exposure to fast-growing markets in west and east Africa and backing management teams in those countries ," Mr Bonamour said on Sunday.
The Kenya deal is the fourth broadcast-related acquisition in Africa by Times Media Group in about seven months.
Since September Times Media has spent just over R360m buying into broadcast. In September the company acquired a 32.26% stake in Ghana’s Multimedia Group for R144m. In December it bought a 65% stake in local radio station Mpower, which is now called Rise FM, for R6m and in January it bought a 60% stake in Vuma FM in KwaZulu-Natal for R25.6m.
Times Media plans to use RAG, one of Kenya’s top three media groups, to further spread its wings in East Africa.
RAG’s broadcast assets in Kenya include Kiss FM, Classic FM, Radio Jumbo and Kiss TV. The TV assets will be replaced by a digital terrestrial TV offering.
It is headed by founding shareholders Patrick Quarcoo and William Pike and has minority shareholders.
RAG’s newspaper, The Star, is Kenya’s third-largest publication in terms of circulation.
Mr Pike and Mr Quarcoo also own Uganda’s Capital radio and Beat FM.
Times Media is looking to buy 49% of RAG’s Ugandan assets, subject to due diligence.
"The Kenyan economy is the biggest in East Africa and this is reflected in its relatively developed media market which takes about 80% of adspend in the region," Times Media said on Friday. "With a population of about 43-million and gross domestic product growth of 4.5% it has scale and the ability to provide a platform for other East African opportunities, especially in Tanzania and Uganda."
RAG is estimated to make R45m normalised earnings before interest, tax, depreciation and amortisation for the year ended June 2014. Times Media will acquire existing ordinary shares, new ordinary shares and the acquisition of shareholder loans.
"This can only be good news for everyone concerned," RAG MD Mr Quarcoo said.
