Harry Sloan, the Hollywood dealmaker and former studio boss who helped secure a Nasdaq listing for Indian DTH operator Videocon d2h, has highlighted India as a prime candidate for a similar deal, after evaluating investment options in traditional and digital media worldwide.
“We needed to find companies that have more than a billion-dollar valuation, so there’s some liquidity that we can invest US$300-500 million in, which can grow like an IPO,” Sloan explained, outlining his investment approach at this year's APOS conference.
“You can’t find that in the US market,” Sloan continued. “In terms of looking for that kind of growth, there is the rest of the world, and there is India. India is in a class by itself.”
Sloan, who took a successful punt on European TV in the 90s by building up and selling Scandinavian broadcaster SBS, is now evaluating growth opportunities in digital media and global growth markets.
The openings he wants, however, are few and far between.
“We may have missed Indonesia, because Indonesia went through a three, four, five, six-fold increase in the value of their stocks,” Sloan said.
“We were talking about investing in Indonesia in 2011. We didn’t make it. One of the reasons we didn’t make it was the political environment was a little uncertain.”
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Videocon d2h became the first Indian media company to list in the US after making its Nasdaq debut earlier this year.
If it delivers on its potential, it could pave the way for industry peers in growth markets around the world to follow suit.
Hollywood veteran Harry Sloan, who helped put the deal together, talked to Media Business Asia about his outlook for India and other markets, in an exclusive video interview on the sidelines of APOS.
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India offers a rare mix of growth, stability and openness to foreign investors, Sloan noted.
Nonetheless, he remains open to other growth markets, including in Southeast Asia, for his next venture.
“Right now, there’s so much money among US institutional investors looking for media deals, because the US market has really been weak for the last year in terms of stocks to buy and new ideas there,” he told APOS attendees.
“We think we can bring opportunities, as we did with Videocon.”
Sloan took Videocon d2h onto the US public markets via listed shell company Silver Eagle, which raised US$325 million in its own IPO just under two years ago.
Silver Eagle paid US$273.3 million for 38.4% for the pay-TV operator, closing the deal at the end of March. In the process, Videocon d2h became India’s first media company to list in the US.
Before Silver Eagle, Sloan co-created another acquisition vehicle Global Eagle, which took a punt on digital media with a WiFi-enabled in-flight entertainment play.
Both deals were engineered with Jeff Sagansky, who is joining Videocon d2h’s board with Sloan.
Both men are veterans of the US TV and movie industries, including leadership roles at Lionsgate and MGM for Sloan, and at CBS and Sony Entertainment for Sagansky.
Right size, right time
The in-flight entertainment assets were a rare find, Sloan said, as most digital media companies looking for investment are either operating on unproven business models or have quickly gained multi-billion dollar valuations.
That makes another growth markets deal likely, even though few media businesses have reached the scale that puts them on the radar for institutional investors in the US.
“There will be two opportunities for investors here,” Sloan argued.
“The first is to find the companies, like Videocon in this case, that we can take public and we can get US investors a nice position in,” he said.
“But then, because of the growth I am talking about, we will get to three, four, five, ten billion-dollar market caps, and the mid-cap and large-cap investors will be able to come in.”