PVR purchases Satyam, 16 other multiplexes for Rs 633 cr

PVR, India’s largest multiplex operator by far, said it will acquire 72% of SPI Cinemas, which operates 17 multiplex theaters in South India including Chennai’s Sathyam, for around Rs 633 cr in cash, and the remaining 28% by issuing its own shares.

SPI Cinemas is a leading cinema player in South India with 17 multiplexes, or 76 screens, in 10 cities. It has another 13 screens under construction.

It is the No.1 cinema in Chennai with 31 operational screens in the city, including the iconic Sathyam Cinema which was established in 1974 and is a landmark in the city.

The firm is promoted by businessmen Kiran Reddy and Swaroop Reddy.

“The Amalgamation will provide an opportunity to better leverage the consolidated assets and capital base, build a stronger and sustainable business, and improve the potential for further growth and expansion of the business of the company,” PVR said.

Besides Sathyam, SPI operates cinemas under brands such as Escape, Palazzo, The Cinema and S2 Cinema.

The acquisition will make PVR the No.1 multiplex chain in the metros of Bangalore, Hyderabad and Chennai.

In addition to the 89 screens (including the 13 upcoming), the company has a pipeline of 100+ screens that can be added in the next 5 years in South India, PVR said.

Against 31% occupancy for PVR, SPI has an occupancy of 58%, the highest in the industry.

PVR, which has 164 screens and 25 properties in South India, said the acquisition will help it derisk its business and give a boost to growth.

“South India has a robust local box office with three big languages (Tamil, Telugu and Kannada) contributing 37% to the Indian box office,” it said, adding that per capita movie consumption is highest in the region, which drives up occupancies.

The five South Indian states contribute 49% of total screens in the country. However, only 14% of these screens are in multiplexes, compared to 60% of the screens in North India and 47% in Western India.

“This provides a significant opportunity for multiplexes to grow in that region,” PVR said.

After the acquisition, PVR will become the seventh largest multiplex chain in the world by number of admissions per year.


The aggregate cost of acquisition of 71.69% price at which the shares stake in SPI shall be approximately Rs 633 cr.

If the remaining 28% is not acquired in lieu of shares, PVR will acquire it from SS Theatres for cash of up to Rs 300 cr.

The acquired company had revenue of Rs 310 cr last year and is expected to have revenue of Rs 4,10-425 cr this year, it added.

It said the operation will deliver a sustainable exhibition EBITDA margins of 21%-23% post integration and synergies.

The turnover of SPI was Rs 271.32 cr in FY17 and Rs 241.37 cr in the year before that.