New Delhi: Private FM radio broadcaster Music Broadcast Ltd (MBL) on Monday announced that its board has approved the acquisition of the radio division of Ananda Offset Pvt Ltd (AOPL) in Kolkata by way of slump sale. Running under the brand name Friends 91.9 FM, the radio station of Ananda is operational since 2007.

A statement from the company said the transaction allows MBL to tap the Kolkata market which is one of the top five markets in the country, besides being able to explore the large potential it offers from national advertisers. MBL has had a sales alliance with AOPL for the last five years. The transaction is expected to be value accretive and help in improving the Ebitda margins.

Under the terms of the agreement, MBL will acquire 100% ownership of the radio division of AOPL, subject to approval of the ministry of information and broadcasting.

“This acquisition gives us access to the Kolkata market considered one of the top five markets in the country which was earlier not present in our bouquet," said Apurva Purohit, president at Jagran Prakashan and director at Music Broadcast Ltd which runs Radio City.

Purohit added that their coming together with a strong and established brand like ‘Friends FM’, and the high quality local team the latter has will give them both several opportunities to improve their EPS (earnings per share). AOPL’s revenue for the first half of FY18 stands at Rs5.83 crore. MBL, which was earlier a 39-station network controlling 62% of India’s FM population will now be a 40-station network looking at 71%.

Industry experts say acquisitions like AOPL are likely to happen more frequently in the coming months.

“As restrictions on mergers and acquisitions in the Indian radio industry come to an end, we shall see more such consolidations where smaller and standalone companies who witness lack of clarity on licences from the government are taken over," said Jehil Thakkar, partner at management consulting firm Deloitte India. “Earlier, the bet was more on creating a localised (radio) market. But particularly in the large cities, significant advertising remains national and a national footprint (for radio stations) is critical for a value offering to clients," he added.

HT Media, publisher of Mint, operates radio channels under the Fever 104 FM and Radio Nasha brands that compete with Music Broadcast’s stations in some markets.