Entertainment services firm Prime Focus raising $52.8M from Macquarie Group

Mumbai-based visual entertainment services company Prime Focus Ltd is raising Rs 313 crore ($52.8 million) from Macquarie (UK) Group Services Ltd, as per a stock market disclosure.

The funds will go into its wholly owned Dutch arm Prime Focus World N.V. and the deal has been struck at an enterprise valuation of Rs 1,770 crore ($300 million).

The investment will be deployed in two phases: Rs 224 crore ($38 million) in the first phase and Rs 89 crore ($15 million) in a second phase.

The capital raised will be used for building a global creative services platform, near-term strategic acquisitions and deleveraging debt in the parent company, Prime Focus.

Namit Malhotra, founder of Prime Focus, said: “In the past five years, our business has gained tremendously through expansion of our product offerings and entrance into new markets.Combined with the backing we have received from our other financial partners AID Partners Capital and Suntrust, the investments will allow Prime Focus World to continue to expand and diversify our creative and technological offerings around the globe.”

As part of the deal, Prime Focus has also approved a corporate guarantee of up to $44.6 million in favour of Macquarie (UK) Group to secure the obligations of Prime Focus World Ltd, Mauritius, and a wholly owned subsidiary of Prime Focus Ltd, the company said on Friday.

Prime Focus provides creative and technical services to the film, broadcast and advertising space. It offers pre-production to final delivery services such as 2D-to-3D conversion, video and audio post-production and digital distribution, among others. The company employs 3,500 people and operates facilities across North America, the UK and India.

It is also planning to launch operations in China, following a joint venture formed with AID Partners Capital and Zhejiang Jingqi Wenhua Chuanbo, three months ago. In the JV, Prime Focus invested $3 million and seeks to provide the company’s services in China, Hong Kong, Macau and Taiwan.

At the same time, Hong Kong-based private equity firm AID Capital Partners invested $10 million in Prime Focus.

Last October, Standard Chartered PE invested $35 million in the company. Soon after, it also put another $35 million into the firm by picking up non-convertible debentures.

Sydney-headquartered Macquarie Group, which provides banking, financial, advisory and investment services, has invested in several companies in India. In the recent past, it co-invested in Mumbai-based Hathway Cable and Datacom Ltd, along with Providence Equity Partners. Earlier, Macquarie invested in companies such as PTC India Financial Services Ltd, Aeroflex Industries Ltd, Bharti Infratel Ltd and Sical Logistics Ltd, among others.

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