Destra to Acquire Central Station Records and MRA Entertainment for $14 million
27 November, Sydney; Australia’s largest independent music and digital media company, destra Corporation Limited (ASX:DES), announced today it was entering into an agreement to acquire Central Station Records and MRA Entertainment from Home Leisure Ltd (ASX: HLD) for $14 million.
Destra is acquiring Central Station Records and MRA Entertainment for a consideration of $12.5 million cash and $1.5 million in vendor financing. The price is based on the achievement of financial targets and conditions. Destra will fund this acquisition using the cash generated from the recent rights issue and bank debt. The acquisition is subject to HLD shareholder approval later this year.
Central Station Records and MRA Entertainment generate over $3 million EBITDA per annum. Central Station Records and MRA Entertainment management teams will remain with the business.
Destra Chairman, Carl Olsen said the acquisition was strategic to destra’s position as Australia’s leading independent record and digital media company.
“Destra have illustrated a strong, consistent pattern of investment in profitable contentrich businesses. One of our core priorities has been to identify music and entertainment assets that have an unrealised or underdeveloped digital potential. This extends to our capacity to create advertising opportunities around targeted, online communities.” Central Station Records (CSR) is one of Australia’s iconic independent record labels, with a music recording heritage of over 30 years. CSR specialises in contemporary dance and youth culture music with highly respected brands such as; Wild, Skitz Mix and Fuzzy included under the CSR banner. CSR has recently released music by major local and international artists including; Dannii Minogue, Roger Sanchez, Freeform five and Infernal.
MRA Entertainment is a successful independent music CD and DVD publisher. MRA’s DVD catalogue contains over 1,000 titles, with a focus on children’s entertainment, TV series and extreme sports. MRA licenses DVD content, where possible, that has the ability to leverage off TV and promotional merchandise exposure. The MRA music and music video catalogue has over 3,500 titles in CD and DVD. The titles vary from full price CDs in strong genres such as World Music and Adult Contemporary to a popular range of budget compilations.
Destra CEO, Domenic Carosa said, “Central Station Records is one of Australia’s most respected and innovative independent record labels. We intend to invest in the digital opportunities offered by CSR’s world class brands and artists including; music video streaming, paid music downloads, merchandise and online advertising opportunities. We will also look to develop brand extensions including Wild TV and specialised radio content.
“In addition, MRA’s licensed DVD and CD content offer lucrative opportunities for online distribution. MRA have invested in acquiring the Digital Rights to the majority of its audio catalogue, enabling us to take immediate advantage via our portfolio of existing digital music online assets, including MP3.com.au. “The inclusion of CSR and MRA Entertainment in destra’s portfolio of entertainment assets will have a positive impact to our business. We are committed to growth both organically and through targeted acquisitions. This model is working well, as evidenced by the 2006 Deloitte’s Fast 50 companies award, where destra was ranked the 27th fastest growing technology company in Australia.”
HLD Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
