PE-backed Focus Media re-lists in Shenzhen

The process was delayed when the chairman of the initial target shell company had to resign following a regulatory probe. Hedy Holdings was chosen instead and that entity agreed to acquire a 100% stake in Focus Media in a deal worth RMB45.7 billion ($7.37 billion).

Hedy exchanged assets worth RMB880 million with Focus Media and paid RMB4.93 billion in cash to Focus Media China Holdings (FMCH), an offshore shareholding entity. Meanwhile, the listed company issued 3.8 billion shares in exchange for Focus Media shares held by other stakeholders excluding FMCH, for a total consideration of RMB39.7 billion. Hedy financed the deal through a RMB5 billion private placement.

China Everbright, one of the PE investors, noted in a statement that from the suspension of trading in late April to December 17, Hedy's shares gained 266.6%. It said this reflected "the market’s recognition of the privatization deal and Focus Media’s future prospects."

Everbright, which committed $50 million to the privatization, holds a 1.35% stake in Focus Media. CITIC Capital Partners has 9.13%, The Carlyle Group and FountainVest Partners each have 7.85%, Fosun Group has 8.09% and Primavera has 0.67%. Jason Jiang, Focus Media's CEO, is ultimate controller of the entity that owns Hedy.

The investor group took Focus Media private at a valuation of $3.7 billion. Earlier this year, a partial stake was sold to 36 domestic institutional investors in a transaction that valued the business at RMB45 billion. Subsequent to the initial reverse merger plan being announced, Shenzhen-based Fortune Capital invested RMB300 million in Focus Media.

Founded in 2003, Focus Media operates an advertising network in various Chinese urban locations. The company uses audiovisual television displays that are placed primarily in high-traffic areas of commercial office buildings such as in lobbies and near elevators, as well as in large retail chain stores and other venues.

In 2014, Focus Media posted revenue of RMB7.5 billion, an increase of 12% from RMB6.7 billion from 2013, while net income came to RMB2.4 billion, compared to RMB2 billion in 2013.

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• Topics
• Greater China
• Media
• Exits
• Media
• China
• Exit
• Fountainvest Partners
• The Carlyle Group
• China Everbright
• CITIC Capital
• Primavera
• Fosun Group