Al Rai Media Group has acquired Publisher Printing Press Company WLL for KD48.5 million ($176.3 million) and sold Al Rai Television Company WLL for KD20.6 million ($74.8 million).

The company will continue to manage Al Rai Television as part of a long-term management agreement and will be responsible for all day-to-day decisions. GulfMerger acted as sole financial adviser to Al Rai Media Group on its financial restructuring and the execution of these two landmark strategic transactions.

Based in Kuwait, Publisher Printing Press (PPP) is engaged in the marketing and sale of print media titles in Kuwait. The company is also engaged in printing for the media industry. For the nine-months ending September 30, 2008, PPP generated operating earnings of KD6.4 million.

With the acquisition of PPP, Al Rai Media Group has moved to integrate key strategic capabilities into its operations, namely printing, marketing, sales, and distribution. These capabilities will support Al Rai Media Group in its growth as it plans to introduce, print and distribute new print titles as well as it seeks to expand across the region.

Moreover, the acquisition will allow Al Rai Media Group to consolidate the full earnings of PPP since January 1, 2008 amounting to KD6.4 million for the nine-month period ending September 30, 2008.

“Clearly this acquisition will result in stronger integration with our print media business as well as bring our company to profitability this year as we consolidate the stable and growing earnings from PPPprincipally earned from the sale of advertisements and the distribution of media titles,” stated Yousef Al Jalahma, vice chairman of Al Rai Media Group.

As part of its reorganisation to position itself for growth and profitability, Al Rai Media Group also sold Al Rai Television WLL, its fully-owned subsidiary currently engaged in free-to-air television broadcasting in the region under the Al Rai TV brand, to Abdulaziz & Jassim Trading.

Al Rai Television began broadcasting in 2004 and has been growing in market share in key GCC markets, namely Kuwait and Saudi Arabia. While Al Rai Television has been successfully growing in popularity, the business will continue to require significant investments and additional time to reach profitability.

For the nine-months ending September 30, 2008, Al Rai Television generated losses of approximately KD1.7 million.

As a result of the acquisition of Publisher Printing Press and the sale of Al Rai Television, Al Rai Media Group now is expected to generate KD5 million in operating earnings in 2008, and KD17 million in net earnings as a result of a capital gain on the sale of Al Rai Television.

The company plans to apply for a listing on the Kuwait Stock Exchange during 2009. Once listed, with KD5 million in earnings, Al Rai is expected to rank amongst the Top 10 most profitable listed companies in the Services sector.-TradeArabia News Service