Primedia Stakeholders Explore Sale amidst Broadcasting Sector Growth

In a strategic move that reflects growing interest in the African broadcasting space, Primedia Group’s private equity shareholders are actively contemplating the sale of their stakes. The Johannesburg-based broadcasting heavyweight has seen significant improvements under CEO Jonathan Procter, leading to a noticeable increase in its market valuation.

Primedia, popularly known for assets such as Eyewitness News and the 702 radio channel, has experienced a boost in operating cash flow, a change that positions it well for potential negotiations with prospective buyers, both locally and internationally. This detail surfaced through sources familiar with the matter who prefer to remain anonymous, as the discussions are still private.

The heightened attention towards the broadcasting industry within Africa coincides with a demographic boon—the continent boasts the youngest and fastest-growing population globally. This demographic factor, coupled with increased mobile usage and more affordable data, has made the sector increasingly attractive.

In a relevant industry development, French media company Canal+ is undertaking a consequential transaction to acquire South African broadcaster MultiChoice Group for a staggering $3 billion. Such movements signal a robust appetite for expansion in the African broadcasting terrain, where Primedia aims for a 25% hike in its earnings before interest, taxes, depreciation, and amortisation, targeting R1 billion ($54 million).

While Primedia has been approached by interested parties in the past, according to official statements, it remains to be noted that any serious proceedings regarding the sale are yet to be publicly unveiled by the board. Primedia’s ownership includes notable firms such as EPE Capital Partners, FirstRand, Old Mutual, and the Mineworkers Investment Trust.

Rand Merchant Bank and Mineworkers Investment have chosen not to comment on the matter at this point. Meanwhile, EPE Capital and Old Mutual Private Equity have directed inquiries back to Primedia, signifying that sale discussions, if any, are still in nascent stages without certainty of fruition.

The broadcaster has a pan-African presence, operating across eight countries including economic powerhouses such as South Africa, Nigeria, and Zimbabwe. In aligning itself with contemporary content delivery methods, Primedia has expanded into studio-production with licensing rights for local adaptations of popular shows like the Masked Singer and Deal or No Deal. Moreover, the company has tapped into the lucrative streaming market through content distribution deals with giants like Netflix and Apple+.

Primedia is also diversifying its revenue streams by stepping into the world of sports advertising and sponsorships, aligning with a broader strategy to sharpen its digital focus.

Should the shareholders decide to proceed with the sale, the improved financial state of Primedia could set the company's valuation somewhere between $350 million and $500 million. The move would mark a significant shift in the South African broadcasting landscape, fueling further interest and investment in a region ripe for media and digital transformation.