In a landmark deal, Nimbus Communications, with a business mix of media, entertainment and sports, has attracted $ 45.5 million (approx Rs 197 crore) from 3i, the largest ever private equity investment in the Indian media and entertainment industry. The investment marks the entry of 3i, a world leader in private equity and venture capital, into the Indian market.
Said Harish Thawani, Executive Chairman, Nimbus Communications Limited, said, “3i was able to combine its global media expertise and local execution skills to speedily conclude this investment. But, above all, the chemistry between us has been fantastic and we share a common belief in the global abilities of Nimbus and that’s where I believe 3i will add strategic value.”
The investment will be deployed to fund sports rights acquisitions, develop global sports events, augment long-term working capital, fund investments in TV production and infrastructure expansion, finance Indian language and international film production, Indian language film distribution, mobile content distribution, and develop further digital content for wireless and video-on-demand platforms. Nimbus will also explore investments in sports and lifestyle broadcasting.
Talking about 3i’s entry into the Indian market, Anil Ahuja, Managing Director & Co-Head Asia, said, “3i likes companies that seek aggressive growth tempered by prudent capital management. 3i believes that Nimbus with its impressive track record, management depth and global business strategy is well positioned to achieve its goal of becoming a billion-dollar company by 2010.”
According to Darshan Desai, Managing Director of London-based financial services boutique, Euromax Capital, which was exclusively mandated in this transaction, “Euromax Capital has been at the forefront of building bridges between Western capital and Eastern enterprise. In this landmark deal, Euromax Capital has catalyzed the first Indian investment by Europe's premier private equity house 3i into Nimbus.”
According to a CII-KPMG report, the entertainment industry in India is estimated at around $ 5 billion (Rs 21,800 crore) for 2004 and is projected to grow by 20 per cent year-on-year to touch $ 13.7 billion (Rs 59,500 crore) by 2010.
Television that overtook the film industry a few years ago will form the largest chunk in the entertainment industry, constituting over 60 per cent revenues, with expected revenue growing from $ 3.18 billion (Rs 13,900 crore) in 2004 to a whopping $ 8.5 billion (Rs 37,100 crore) by 2010. The KPMG projections also see a near threefold rise in film industry revenues from $ 1.35 billion (Rs 5,900 crore) in 2004 to $ 3.27 billion (Rs 14,300 crore) in 2010.