US Merchant Bank Invests in Grupo Prisa
Spain´s Grupo Prisa, one of the largest media groups in the Spanish speaking world, has sold 4.5% of its shares, which were held by Prisa itself, to US merchant bank Talos Partners. The investment is valued at 40 million euros (aproximately $56 million). In addition, Talos Partners acquired warrants to buy an option to buy up to 1,000,000 shares at 6 euros per share (Prisa shares currently are traded for aproximately 4 euros each).
The transaction occurs at a delicate moment for Prisa´s finances. Grupo Prisa has been hard hit in the crédit crunch that started affecting financial markets in early 2009 (see article: How will Latin American and Hispanic Companies Fare in the Current Credit Crunch?). However, Prisa recently got a 2 billion euros loan maturity extensión. HSBC, La Caixa, Banesto, BNP, Caja Madrid and Natixis approved to extend the maturity of the loan until March 2010. The loan had been used by Prisa to buy Spanish pay-TV firm Sogecable.
Prisa’s holdings include Spain’s largest paid daily El Pais and several TV and radio assets as well as educational book publishing group Santillana. Prisa is also a majority investor in Grupo Latino de Radio, which owns and operates radio stations in the U.S. and Latin America.
Talos Partners is a private merchant bank in New York City with assets of more than US$ 350 million. Its founder Robert Brazell is an experienced and successful entrepreneur who has started and operated ventures such Overstock.com, ehow.com and Sandbox.com. For the last 15 years Brazell has been a vocal critic of the existing traditional business models used by media conglomerates in the US and in the world. Its partnership with PRISA is its first alliance with a media company.
Retail Media Joint Venture
In addition, Prisa and Talos Partners announced a joint venture to introduce the retail media business in Spain, Portugal, and Latin America. Talos Partners owns In-Store Broadcasting Network (IBN), one of the worlds largest retail media companies. IBN and Prisa will form 50/50 joint venture.
IBN will bring its patented technology for personalized in store communications that delivers music and interactive video in grocery and chain drug stores.
PRISA will provide experience in radio programming tailored to regional idiosyncrasies. Currently PRISA operates more than 1,200 radio stations in 10 countries, being leaders in Spain, Colombia, and Chile.
PRISA will also provide a broad news gathering organization with seasoned editorial experience in 22 countries, and audiovisual production capacity in Spain, Portugal, and the U.S.
Currently, IBN leads the U.S. retail media with a presence in more than 13,500 stores nationwide and 150 million unique shoppers that hear its programming on a monthly basis.
Juan Luis Cebrian, Prisa´s CEO, said "PRISA is committed to expanding our customer reach beyond the traditional limits. We feel that Retail Media is the perfect fit for PRISA assets, as we can leverage our radio and television production, content, and sales infrastructure into a new distribution channel. We also like the fact that it increases our presence in the U.S. market."
Rob Wolf, IBN EVP Research, added: "In-store media and shopper marketing will soon be the foundation of every brand media plan, with other media supporting the final, most important message delivered at the point of sale. The store is the ideal research environment, allowing marketers to measure, evaluate and optimize their advertising effectiveness almost in real time."
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