New company to be formed, creating a world-leading provider of innovative global media services and solutions
The overwhelming access to on-demand media via the internet, satellite, IPTV, cable, online and mobile platforms to handheld devices, desktops, live venues, radio and television, anytime and anywhere, has forever changed the time-to-market and monetization model for content owners, sports leagues and right holders. Media companies and their distribution partners are faced with the growing challenge of seamlessly and cost-efficiently delivering high quality digital content in multiple file formats across a myriad of media platforms and outlets to targeted destinations globally, with varying viewing requirements. All-the-while ensuring its quality, security, resiliency and most importantly, reducing the content distribution time gap from source to end-points.
As a result, the media & entertainment market has been going through both a transition and consolidation phase in the past few years. Larger studios are bringing more work back in-house and building out their workflow infrastructure in an attempt to reduce expenditure outflows. Cloud based IaaS (Infrastructure as a Service) providers like Amazon Web Services, Lunacloud, Rackspace and WorkXpress are taking marketshare from traditional studio service providers. Smaller ‘middle-ground content management and delivery’ companies are strategically finding that it’s more beneficial to merge with complimentary like-minded companies to form larger all-in-one entities that can offer seamless integrated services and solutions to their clients. One such upcoming merger will be with RR Media (NASDAQ: RRM) and SES Platform Services (NYSE Euronext Paris and Luxembourg Stock Exchange: SESG.
RR Media, a leading provider of global digital media services to the broadcast and media industries, announced recently that it had agreed to be acquired by SES and would merge its activities with SES Platform Services (“SES PS”) to form a yet to be named world-leading provider of media services and solutions. The new organization will offer full continuity and enhanced service to SES PS and RR Media’s existing customers.
Under the merger, SES will acquire a 100% ownership of RR Media, paying $13.291 per share, or a 52% premium to the closing price of the Company’s shares as of February 25, 2016. This corresponds to an Enterprise Value of $242 million. The acquisition of RR Media by SES S.A. has been approved by the Boards of Directors of both companies, and is subject, among others, to regulatory approvals and the approval by the general meeting of shareholders of RR Media, which are expected to be completed no later than the third quarter of 2016.
Elad Manishviz, Chief Marketing Officer for RR Media expanded on each company’s value chain and why the merger is beneficial for both companies. “RR Media works in partnership with the world’s leading media players as both an enabler and accelerator to transform our clients’ content into valuable media assets. Our agnostic ecosystem of digital media services seamlessly maximizes the potential of media and entertainment content, covering four main areas: 1) smart global content distribution network with an optimized combination of satellite, fiber and the Internet; 2) content management and channel origination; 3) sports, news & live events; and 4) online video services.”
According to Manishviz, their global network of media centers, including the recently opened 95,000 sq. ft. Miami-based playout center and Master Control Suites gives broadcasters, TV channels, sports organizations and rights holders access to the full-range of RR Media’s services to deliver localized content to virtually anywhere in the world. “We are an integrated services company that leverages current and evolving technologies; seamlessly integrating them into optimal services and functional solutions for our clients – from content preparation and management, playout and delivery, content localization, ad insertion, content packaging to delivery. Our value-add is to help our customers extend their audience reach effectively, in both the handling of the content and how it’s delivered – in short, what type of content you want to deliver; where and to whom you want it delivered to; and in the most transparent, resilient, secure and robust way possible,” said Manishviz. “We’re agnostic in how we package content so our whole value chain from ingest to device guarantees a consistent high quality of service.”
Looking toward the future, Manishviz sees the industry moving from silo based workflows to where assets are treated holistically throughout its lifecycle by a single entity, division or brand. As such, he acknowledged the need to continually innovate to complement the evolving workflow requirements of their customer base. “Last year we introduced our Solar ‘open media’ platform which lets us package all of our services and support of our media centers on a global basis where we have complete control from ingest, to delivery in any format or screen. Additionally, like an operating system, we can optimize any workflow and content operation while giving our clients a virtual dashboard to monitor workflow progress of their assets.”
RR Media’s value chain provides scalable, converged digital media services to more than 1,000 broadcasters, content owners, sports leagues and right holders. Every day, the company manages and delivers over 24,000 hours of broadcast content, over 4,000 hours of online video and VOD content and over 350 hours of premium sports and live events. The company delivers content to 95% of the world’s population reaching viewers of multiplatform operators, VOD platforms, online video and direct-to-home services.
Continuing, Manishviz added that SES, as the largest global platform for video in terms of reach and channels, adds global scale and considerable insights from their successful development of the SES PS in Europe. The newly merged company will provide customers with a comprehensive range of innovative video and media solutions on a global scale, with expanded services and the complementary capabilities of both RR Media and SES PS. This will include highly optimized content management and distribution solutions that utilize the combined network of both RR Media and SES PS, as well as leveraging their global content distribution network with optimized delivery over multiple satellite positions, large fiber network and the Internet, in order to maximize audience reach and add new monetization capabilities for their expanding customer base.
Summing up the merger, Ferdinand Kayser, Chairman of SES Platform Services, recently noted that, “This is an exciting acquisition and an important milestone in the execution of SES’s differentiated strategy focused on Globalization, Verticalization and Dematuring. The addition of RR Media further accelerates the globalization of SES’s services businesses, establishing a world-leading next generation video and media service provider.”
If the RR Media and SES PS upcoming merger is an indication of what’s to come, one might take a small leap-of-faith to foresee a continuing trend toward increased M&A activity and consolidation in the market. In the meantime, I look forward to the newly named global digital media services powerhouse, and its broader set of services and solutions for television broadcasters, production companies and platform operators.
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Mr. Chan is a serial entrepreneur, philanthropist, author and angel investor. He played key executive roles early on in helping to usher in both digital audio and digital video technologies for the recording, broadcast and post production industries. His expansive background spans over three decades in ever increasing executive roles in operations, business development, engineering and sales/marketing in the information technology, media & entertainment, storage and networking, and other related high technology industries. He is an active mentor and senior advisor to many established and start-up companies, a market/technology analyst, and has over two decades of experience in brand development, management consulting / company turnarounds, creative advertising and public relations.
A graduate of California Polytechnic State University, San Luis Obispo, Mr. Chan is celebrating his 10th year as a board member of the Fullerton College Foundation, 16th year as an Entrepreneur-in-Residence and mentor for the Small Business Institute at California State University Fullerton and incubators. Additionally, he is a volunteer member of DECA (Delta Epsilon Chi and Distributive Education Clubs of America); an advisor to the College of Engineering's Global Waste Research Institute, Cal Poly, San Luis Obispo and a member of the President’s Green and Gold Society. Passionate about hospice care, he was the past Board President for the Healing Hearts Association; and is a regularly featured speaker at many MBA and Doctorate level lectures around the country. He has presented and published over 30 papers worldwide, is a book co-author, an editorial board member for the Society of Motion Picture and Television Engineers, Senior Editor for Broadcast Beat Magazine, past Senior Editor for Computer Technology Review, and is a regularly featured Contributing Editor to many US and international trade publications for over 30 years.
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