Editor | 04-09-2013
As part of its global expansion plans, digital content management firm RRsat Global has acquired of content management services provider JCA.
Under the terms of the deal RRsat will pay $9 million in net cash for 100% of TVP Group — of which JCA is a wholly-owned subsidiary company. It will also make an additional payment of $4.5 million which will be deferred, conditional on business results including revenue growth and profitability in the three years following the acquisition of the London-based company which effectively facilitates the creation of RRsat Europe in one of the world's largest media and broadcasting centres.
Since it was acquired by TVP Group in 2004, JCA has shown growth exceeding 400% reaching revenue of just under $10 million (non-GAAP) during the last year as well as gross margins and profit margins that are consistently higher than RRsat's. It has a customer base including BBC Worldwide, Sony DADC, Shine International, Channel 4, Classic Media, DRG and Film4 as well as access to additional higher tier local broadcasting customers in the UK and Europe. Once it has completed the integration of JCA, RRSat plans to increase its core service and expand its global customer base and portfolio.
"This acquisition and the formation of RRsat Europe Ltd are important milestones in the implementation of our strategy to become a global company with local presence, closer to our clients," explained Avi Cohen, RRsat CEO. "There are two major aspects to our business: content management and content distribution. While the content distribution aspect involves our state-of-the-art facilities in the US and Israel, content preparation and management require a local presence working closely with our customers. The addition of JCA's sophisticated local operation in London will enable RRsat to leverage local talent and provide services specifically for content preparation and content management to customers in Europe. This is an important asset that will expand our scope of services and we are confident that it will enhance our leadership position in the market."
Added JCA's managing director, Simon Kay: "We see that there will be tremendous benefit from leveraging RRsat's content management and distribution capabilities and we are excited to offer these sophisticated services to our clients. Evolving from being a stand-alone local company to being part of a global business will enable us to offer a greatly expanded service portfolio. We are committed to pursuing this opportunity and maximising our capabilities as part of the RRsat group."