Agora enters the multiplex cinema market

By Katarzyna Grynienko
    Agora Group has signed a preliminary agreement to buy out 84% of shares of Centrum Filmowe Helios, the biggest Polish multiplex chain.

    Agora Group (www.agora.pl), one of the biggest Polish media companies involved in press ( daily Gazeta wyborcza), radio (TOK FM), specialist magazines and Internet (popular portal Gazeta.pl) is branching out to the cinema market. The company will buy the majority of Centrum Filmowe Helios (www.heliosenet.pl) shares from Nova Polonia Private Equity Fund (www.novapolonia.pl), LLC and Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V (www.fmo.nl), both advised by the Polish investment management company Krokus PE (www.krokuspe.pl). According to the preliminary agreement signed on March 30, 2010, the total cost of 84% of the shares will be EUR 25 million.

    Helios, founded in 1993 is currently the biggest multiplex cinema chain in Poland. with 24 multiplex cinemas and 2 traditional cinemas with 140 screens and 31,000 seats. The majority of the company's income is generated from selling tickets (74% of total revenue in 2009). According to data from Boxoffice.pl, the market share of Helios Group is 24% (7,7 million) of 39 million tickets sold in Poland in 2009, which places it third in the market after Cinema City (www.cinema-city.pl) and Multikino (www.multikino.pl). The Polish cinema market did not suffer from the economic crisis in 2009 and noted a 16% growth in the ticket sales and 25% growth of revenue from the ticket sales (PLN 81 million) in comparison to 2008.

    "The acquisition of shares of Helios would be in line with the long term strategy of the Agora Group, which entails diversification of its stream of revenues and widening the scope of its activities in the growing sectors of a broadly-defined media market. In addition, it will strengthen the Group's position in the entertainment segment and reduce the dependence of the Group's results on the condition of the advertising market." said Piotr Niemczycki, CEO of Agora SA.

    The biggest private share holder after the finalization of the transaction will be Tomasz Jagiełło, the current Chairman of Helios, who holds 8% of the shares. "I am not planning to sell my Helios shares to Agora. I'd like to further work on developing Helios if that would be the will of the new owner," Jagiełło said when asked for a comment on the new agreement.