Central European Media Enterprises Ltd. agrees to acquire Bontonfilm a.s.
In 2010 Bontonfilm generated revenues (unaudited) of approximately US$37 million and OIBDA of approximately US$2.6 million as adjusted for non-recurring items. The purchase price is on a debt-free basis and consists of initial cash consideration of US$11 million to be paid at closing, subject to a minimum cash balance of CZK36 million (approximately US$2 million) remaining in Bontonfilm. Additional cash consideration currently estimated at a maximum of US$1.5 million may be payable to the sellers in December 2011, depending on the OIBDA achieved by Bontonfilm for 2010, the amount of cash and working capital in the business at closing and the satisfaction of certain other indemnification obligations. Closing of the transaction, which is subject to the approval of the Antimonopoly Office of the Czech Republic and other customary closing conditions, is expected to occur by the end of the second quarter of this year.
Adrian Sarbu, CME's President and Chief Executive Officer, commented: "Bontonfilm is an OIBDA positive and cash generative business that will have an immediate accretive impact on CME's bottom line. This acquisition greatly complements our Czech and Slovak broadcasting operations. It will enable us to maximize the value of our own library in both markets and increase third party revenues and OIBDA of Media Pro Entertainment."
CME is a vertically integrated media and entertainment company operating leading broadcasting, content and new media businesses in six Central and Eastern European countries with an aggregate population of approximately 50 million people. CME's television stations are located in Bulgaria (bTV, bTV Cinema, bTV Comedy, bTV Action and Ring.bg), Croatia (Nova TV, Doma and Nova World), the Czech Republic (TV Nova, Nova Cinema, Nova Sport and MTV Czech), Romania (PRO TV, PRO TV International, Acasa, PRO Cinema, Sport.ro, MTV Romania and PRO TV Chisinau Moldova), the Slovak Republic (TV Markíza and Doma) and Slovenia (POP TV, Kanal A and POP Brio).
Forward Looking Statements
This press release contains forward-looking statements, including those relating to the expected closing date and to our Media Pro Entertainment operations. For these statements and all other forward-looking statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy or are otherwise beyond our control and some of which might not even be anticipated. Future events and actual results, affecting our strategic plan as well as our financial position, results of operations and cash flows, could differ materially from those described in or contemplated by the forward-looking statements. Important factors that contribute to such risks include, but are not limited to, our effectiveness in integrating Bontonfilm's operations in our existing business; the performance of obligations by third parties with whom we have entered agreements; the effect of the credit crisis and economic downturn in our markets as well as in the United States; and Western Europe; decreases in discretionary spending in the countries in which we operate; and our ability to acquire necessary distribution rights and attract audiences.
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