[SatNews] JCA, a London-based provider of content management services, has been acquired by RRsat Global Communications Network Ltd. (NASDAQ: RRST), a provider of digital content management and global content distribution services to the television and radio broadcasting industry.
This acquisition is fully aligned with RRsat's growth strategy of becoming a global company with local presence in key locations. The acquisition is expected to be accretive to RRsat’s earnings within the first full operational quarter post acquisition.
“This acquisition and the formation of RRsat Europe Ltd. are important milestones in the implementation of our strategy to become a global company with local presence, closer to our clients,” said Avi Cohen, RRsat CEO. “There are two major aspects to our business: content management and content distribution. While the content distribution aspect involves our state-of-the-art facilities in the U.S. and Israel, content preparation and management requires a local presence working closely with our customers. The addition of JCA’s sophisticated local operation in London will enable RRsat to leverage local talent and provide services specifically for content preparation and content management to customers in Europe. This is an important asset that will expand our scope of services and we are confident that it will enhance our leadership position in the market.
“The effort to expand our local presence in key markets began with the acquisition of SM2 in 2012. This gave us an expanded local presence in the United States, content management and distribution of lucrative sports events, as well as access to top-tier North American customers. During 2013, we opened an office in Moscow, augmenting our access to customers in Russia and the Commonwealth of Independent States. Today, we are establishing a strong foothold in Europe, specifically in London, one of the world’s largest centers for media and broadcasting. The continued execution of this strategy will allow RRsat to expand further, effectively leveraging our global distribution infrastructure.”
RRsat is acquiring 100 percent of TVP Group, of which JCA is a wholly owned subsidiary. In consideration for the acquisition, RRsat will pay $9 million in net cash. An additional payment of $4.5 million will be deferred, conditional on business results including revenue growth and profitability in the three years following the acquisition. Management expects the acquisition to be accretive during the fourth quarter this year.