Deal focus: KKR eyes Asia content

With traditional media in most South and Southeast Asian markets dominated by conglomerates and large family-run businesses, most private equity deals are relatively small, perhaps $50 million or below. KKR wanted to tap into the lucrative media content segment, but these market dynamics presented a problem.

The PE firm's recently announced media and entertainment investment platform - known as Emerald Media - is a solution. It has committed $300 million to the venture, with The Chernin Group (TCG) participating as a minority co-investor. TCG's existing Asia-focused team, currently operating under the CA Media banner, will join Emerald and KKR will take a significant minority stake in CA Media.

"If you look at the trends in India and other geographies in the region, we see huge changes in consumption patterns. Mobile devices are disrupting how we live our lives, and content is king," says Rupen Jhaveri, a director at KKR. "Emerald gives us the operating mindset and the ability to play in the space [in terms of ticket size] where a lot of the action is taking place."

TCG is a privately held media holding company founded by Peter Chernin, a former COO of News Corp. It invests globally in media, entertainment and technology-related assets. CA Media was created in 2010 by Paul Aiello, who previously worked for Chernin as head of New Corp-owned Star TV Asia. He was joined by Rajesh Kamat, formerly COO of Viacom18 Group and CEO of Colors.

They built up the CA Media portfolio, which currently has four companies in India and one in Indonesia. The company acquired a 49% stake in global independent television producer Endemol's India business, best known for non-scripted shows like "Bigg Boss," the local equivalent of "Big Brother." It has since expanded into scripted and film production.

CA Media also has minority stakes in a live events business and a graphic animation company, as well as incubating a digital celebrity network comprising multiple platforms including video-blogging and merchandise sales. In Indonesia, it backs a free-to-air broadcaster.

Teaming up with KKR as Emerald will see the CA Media team make investments of $15-75 million, as opposed to the $5-25 million they committed previously. "The ticket size throws open many more opportunities," says Kamat. "We would probably have focused on a certain kind of sub-sectors within media, but there is consolidation happening on the distribution front in India with a number of pan-Asian players coming in. We now have access to more of these assets."

The other change is geographic. Emerald will still deploy roughly half of its capital in India, but the rest is expected to be deployed more widely across Southeast Asia and eventually North Asia. "We have a lot of experience in these markets, but we had to prioritize. With the support of KKR these opportunities become very real," Aiello says.

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• Topics
• Media
• Technology
• South Asia
• Southeast Asia
• Expansion
• KKR
• Southeast Asia
• India
• Media
• TMT
• Growth capital