The initial contacts for the sale of Israeli satellites company RR Media Ltd. (Nasdaq:RRM) to an international company in this field have not resulted in a deal, and have been broken off, sources inform "Globes." It was reported five months ago that an international company, probably European satellite company SES, which has a €12.6 billion market cap on the French stock exchange, had expressed interest in acquiring RR Media, and had contacted the company about it.
It is believed that the value in the deal for RR Media, whose market cap has been as low as $117 million, would not have been less than $200 million. RR Media held its IPO under its previous name of RRSat in 2006 at a company value of $210 million, and its current market cap is $148 million.
Rapac Communication and Infrastructure Ltd. (TASE: RPAC), which holds a 34.2% stake in RR Media, reported to the TASE last September, "A non-binding inquiry has been received by RR Media from an international company about acquiring all the shares in RR Media." The announcement continued, "The inquiry is in the early stages, and the parties have not yet reached agreement on the terms of the deal, including the value of the company; there is no certainty that the parties will sign a binding agreement."
Ownership by Rapac and Viola fund
RR Media, managed by CEO Avi Cohen, provides satellite-based outsourcing services to television, radio, and Internet content producers. Rapac is the most veteran shareholder in RR Media, having been a shareholder in the company since before RR Media's IPO. Another prominent shareholder is the Viola Private Equity fund with a 28.5% stake.
Viola invested in RR Media at $8 a share, compared with a current share price of $8.50, by acquiring the shares of Kardan NV (TASE: KRNV;AEX:KARD), which was having difficulties, and founder and former RR Media CEO David Rivel. The fund later enlarged its holdings. Other shareholders in RR Media include Israeli and US investment institutions.
RR Media's revenue totaled $101 million in the first three quarters of 2015, up 2.9%, compared with the corresponding period in 2014. The company's net profit grew 15.3% to $4.2 million, while its non-GAAP net profit remained unchanged at $4.5 million. The company had $14.3 million in cash at the end of the third quarter.
The company has not yet published its financial statements for all of 2015, but its most recent forecast predicted yearly revenue of $140-143 million in 2015, 6.7-9% more than in 2014, and $161-171 million in 2016, up 12.6-22.1%. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) is projected to reach $17.6-20.4 million in 2015, compared with $17.2 million in 2014, and 25-30% growth is predicted in 2016.
RR Media was not acquired in 2015, but it did announce that it had made an acquisition: Satlink Communications for $19 million. Satlink is an Israeli company whose previous owner was Shaul Elovitz's Eurocom Group. The acquisition was designed to expand RR Media's geographic deployment and its business.
Published by Globes [online], Israel business news - www.globes-online.com - on February 2, 2016
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