Jagran Prakashan (JPL), the leading media group, on Tuesday announced the acquisition of Music Broadcast (MBPL), which operates the popular Radio City FM stations.
Foraying into radio business, Jagran Prakashan, which runs leading Hindi daily Dainik Jagran, said the all-cash acquisition of MBPL, which had a turnover of Rs 161.8 crore in the previous financial year, is expected to provide strong return on its investment.
However, the exact deal size could not be ascertained.
Commenting on the development, Jagran Prakashan CMD Mahendra Mohan Gupta said, "This deal will catapult JPL into a leadership position in the radio industry and enable the company to benefit from the rapid growth in radio advertising.
Acquisition of Radio City further consolidates our position as India's leading media and communications group."
Radio business will complement JPL print, outdoor activation and digital business and enable deeper inroads with advertisers both at national and local level, Gupta said.
"The radio business has witnessed significant growth in recent past and is expected to grow at more than 18 per cent CAGR in the coming years," the Jagran Prakashan CMD added.
The all-cash acquisition will be funded through internal accruals and investments, the media house said.
Apart from Dainik Jagran, JPL's publications include Midday, Naiduniya, I-Next, City Plus and Punjabi Jagran.
Radio City operates 20 FM stations in seven states. It has presence in metros as Delhi, Mumbai, Bangalore and Lucknow and has a listener base of 10.8 million.
Music Broadcast had a revenue base of Rs 161.8 crore in the 2013-14 fiscal with 28 per cent growth in ad revenue.
"The Board of Directors of the company at its meeting held on December 16, 2014, approved the entry of the company into the radio industry via acquisition of Music Broadcast Private Limited (MBPL)," JPL said in a filing to the Bombay Stock Exchange (BSE).
"The acquisition is subject to regulatory approvals, including from Ministry of Information and Broadcasting, and execution of binding agreements. As part of the acquisition, the company is acquiring MBPL's holding Company and fellow subsidiary that provides activations," the regulatory filing said.
As part of the deal, the company is acquiring MBPL's holding company and fellow subsidiary that provides activations, it added.
Shares of Jagran Prakashan on Tuesday closed at Rs 140 on the BSE, down 1.20 per cent from its Monday's close. Meanwhile, the scrip was trading at Rs 136.85 a piece, down 2.25 per cent in afternoon trade on Wednesday.