RRSat Expands to Europe, Acquires UK-based JCA

Airport City Business Park, Israel, Sept. 3, 2013 — RRsat Global Communications Network Ltd. has acquired JCA, a London-based provider of content management services, which has an impressive track record of growth and revenues of almost US$ 10 million last year. RRsat, which provides global, end-to-end, content management and distribution services to the rapidly expanding television and radio broadcasting industries, said the acquisition is fully aligned with the company’s growth strategy of becoming a global company with local presence in key locations.

"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," said Avi Cohen, RRsat CEO. “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."

He added RRsat is now establishing a strong foothold in Europe, specifically in London, one of the world's largest centers for media and broadcasting. “The continued execution of this strategy will allow RRsat to expand further, effectively leveraging our global distribution infrastructure," he said.

RRsat also outlined other strategic benefits of the JCA acquisition. The company said it will gain a talented management team, with over 30 years of industry experience, which will strengthen the company’s senior management team. The company will also now enjoy a presence in London, a key strategic market and one of the premier broadcasting centers in the world, providing access to customers in continental Europe with top-tier customer base, including BBC Worldwide, Sony DADC, Shine International, Channel 4, Classic Media, DRG, Film4 as well as access to additional higher tier local broadcasting customers in the U.K. and Europe.

The acquisition will also broaden RRsat's content management capabilities, including expanded content preparation capabilities such as film restoration, ingest and transcoding, content re-versioning, digital platform distribution and its bespoke Media Window providing clients with their own on-line platform.

RRsat is acquiring 100 percent of TVP Group of which JCA is a wholly owned subsidiary. In consideration for the acquisition, RRsat will pay $9 million in net cash. An additional payment of $4.5 million will be deferred, conditional on business results including revenue growth and profitability in the three years following the acquisition. Management expects the acquisition to be accretive during the fourth quarter this year.

"Once we complete the integration of JCA, we plan to increase its core service and expand its global customer base and services," Cohen said.

"Our existing client base will benefit from additional sophisticated content preparation services. We plan to take advantage of the experienced local management team and their access to top tier clients in the U.K and Western Europe and offer RRsat's complete set of content management and global distribution services. Financially, we expect this acquisition to improve our overall profitability."

RRsat management expects to fund this acquisition using cash on hand and through expected operating cash flow of the acquired entity.