Mid day Multimedia Ltd (MML) announced yesterday that it would be merging its publishing business with Jagran Prakashan Limited (JPL).
MML has MiD DAY, Sunday MiD DAY, Gujarati MiD DAY, the largest read Urdu newspaper in India -- The Inquilab and the website mid-day.com.
JPL is India's leading media and communications group, with the group's flagship brand, Dainik Jagran, being the most widely read newspaper in the country with a total readership of 54.2 million.
As a result of the merger, JPL, through its various publication brands and other media-related businesses such as outdoor and event and the resources at its disposal, will help in meeting more effectively the high intensity competition being faced by the publishing business and in rapid expansion of various publication brands in its existing as well as new markets, Internet properties and other related activities of MiD DAY, thereby enhancing the value of brand MiD DAY and its own business for the benefit of all the stakeholders of both companies.
Commenting on the occasion, Tariq Ansari, managing director, MiD DAY, said, "The newspaper business will see some significant challenges in the years to come. Scale and access to resources will be critical factors in the success of any newspaper company."
"By aligning with Jagran we will be able to pool resources with the largest newspaper group in the country to grow profitably and deliver better value to shareholders," he added.
MML has MiD DAY, Sunday MiD DAY, Gujarati MiD DAY, the largest read Urdu newspaper in India -- The Inquilab and the website mid-day.com.
JPL is India's leading media and communications group, with the group's flagship brand, Dainik Jagran, being the most widely read newspaper in the country with a total readership of 54.2 million.
As a result of the merger, JPL, through its various publication brands and other media-related businesses such as outdoor and event and the resources at its disposal, will help in meeting more effectively the high intensity competition being faced by the publishing business and in rapid expansion of various publication brands in its existing as well as new markets, Internet properties and other related activities of MiD DAY, thereby enhancing the value of brand MiD DAY and its own business for the benefit of all the stakeholders of both companies.
Commenting on the occasion, Tariq Ansari, managing director, MiD DAY, said, "The newspaper business will see some significant challenges in the years to come. Scale and access to resources will be critical factors in the success of any newspaper company."
"By aligning with Jagran we will be able to pool resources with the largest newspaper group in the country to grow profitably and deliver better value to shareholders," he added.
At last, the Jagran Prakashan-Mid-Day Multimedia deal has fructified. Instead of acquiring the company completely, Jagran Prakashan is merging the print business of Mid-Day Multimedia — Midday Infomedia (MML) — with itself in a share swap deal. Under the terms of the merger, Mid-Day Multimedia shareholders would get two shares of Jagran Prakashan for every seven shares held by them. The all-stock deal values Mid-Day Infomedia at around Rs 170 crore and compares favourably with Mid-Day Multimedia (MML) current market capitalisation of around Rs 180 crore. MML would continue to own and operate FM radio channels.
The immediate task for Jagran would be to turn around MML's financial fortune. In FY09, the company reported net losses of Rs 11 crore on revenues of Rs 11 crore. The company is saddled with a debt of around Rs 35 crore while its net worth is negative. This won't be difficult, given Jagran Prakashan's highly profitable operations and under leveraged balancesheet.
The acquisition is part of the Jagran strategy to increase its national footprint in the print business either through acquisition or by launching new publications. The deal gives Jagran a national foothold in the English language tabloid market, besides ownership of one of the largest Urdu dailies in the country. Both these are new businesses for the Kanpur-based business and will complement its strong position in the Hindi language market in North India.
In the past few years, Jagran Prakashan has been focusing on two important strategies — first, tapping into the burgeoning young and educated readers (especially those conversant with nitty-gritty of English language) by launching compact editions such as Inext and City Plus and secondly, deriving strong revenues from local advertising. The fruits of the first strategy can be seen in the advertising revenues in December 2009 quarter. The company's advertising from local advertising has increased from 45% in December 2006 to 63% in December 2009 of the total advertising revenues.
Importantly, the company gets entry into the much-coveted Mumbai market. The company foresees an addition of Rs 75-80 crore from the Mumbai market to its overall advertising revenues. And the synergy with Mid-Day Multimedia, which has a robust distribution network and classifieds, would also serve as a big positive of this deal for Jagran Prakashan.
More so, this synergy would work better with newspapers from Mid-Day's stable — Gujarati Mid-Day and Inquilab — getting access to markets (more than 11 states) where Jagran Prakashan is present. These the two regional dailies — Inquilab and Gujarati Mid-Day — would definitely make visible impact on Jagran's operating margin.
The immediate task for Jagran would be to turn around MML's financial fortune. In FY09, the company reported net losses of Rs 11 crore on revenues of Rs 11 crore. The company is saddled with a debt of around Rs 35 crore while its net worth is negative. This won't be difficult, given Jagran Prakashan's highly profitable operations and under leveraged balancesheet.
The acquisition is part of the Jagran strategy to increase its national footprint in the print business either through acquisition or by launching new publications. The deal gives Jagran a national foothold in the English language tabloid market, besides ownership of one of the largest Urdu dailies in the country. Both these are new businesses for the Kanpur-based business and will complement its strong position in the Hindi language market in North India.
In the past few years, Jagran Prakashan has been focusing on two important strategies — first, tapping into the burgeoning young and educated readers (especially those conversant with nitty-gritty of English language) by launching compact editions such as Inext and City Plus and secondly, deriving strong revenues from local advertising. The fruits of the first strategy can be seen in the advertising revenues in December 2009 quarter. The company's advertising from local advertising has increased from 45% in December 2006 to 63% in December 2009 of the total advertising revenues.
Importantly, the company gets entry into the much-coveted Mumbai market. The company foresees an addition of Rs 75-80 crore from the Mumbai market to its overall advertising revenues. And the synergy with Mid-Day Multimedia, which has a robust distribution network and classifieds, would also serve as a big positive of this deal for Jagran Prakashan.
More so, this synergy would work better with newspapers from Mid-Day's stable — Gujarati Mid-Day and Inquilab — getting access to markets (more than 11 states) where Jagran Prakashan is present. These the two regional dailies — Inquilab and Gujarati Mid-Day — would definitely make visible impact on Jagran's operating margin.
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