PVR Ltd, India’s largest multiplex operator by number of screens, is set to to buy Chennai-based SPI Cinemas, formerly known as Sathyam Cinemas.

A statement by PVR cinemas said, the founders of SPI Cinemas, Kiran M Reddy and Swaroop Reddy, will continue to be associated with the business and will provide strategic guidance in integrating the business with PVR.

It said further: “Under the terms of the proposed acquisition, PVR would acquire 222,711 equity shares of SPI Cinemas constituting 71.7 per cent of the paid up equity share capital of SPI from existing shareholders for a total consideration of Rs 633 crore and issue 1.6 million equity shares of PVR Limited constituting 3.3 per cent of the diluted paid up equity share capital of the company pursuant to a scheme of amalgamation between SPI and PVR.”

The total deal could be valued at around Rs 850 crore. SPI Cinemas has a network of 76 screens (68 operational and 8 expected to commence operations soon) across 17 properties and 10 cities. A conference call with the senior management of PVR Ltd will be held on Monday (August 13) to discuss acquisistion of SPI Cinemas.

Thanks to the acquisition, PVR’s total screen count will increase to 706 screens across 152 properties and 60 cities. The acquisition will also propel PVR as the 7th largest cinema exhibitor in the world in terms of annual admissions at its theatres, which will be in excess of 100 million.

Ajay Bijli, Chairman and Managing Director, PVR Ltd said, “The acquisition of SPI Cinemas is of significant strategic value for PVR and will further cement our market leadership position in India. The acquisition will make PVR the undisputed leader in the South Indian market & provide an attractive platform for us to expand in that geography, which currently is highly underpenetrated in terms of multiplexes. Both Kiran and Swaroop have done a tremendous job in building some of the best cinemas in the country and I look forward to their continued partnership with PVR as we take the business to the next level. This transaction is a significant step in helping us achieve our vision of having 1000 screens by 2020.”

Kiran Reddy said, “SPI Cinemas has been revolutionizing the movie watching experience for its patrons by consistently bringing in world class technology and innovative offerings. We are excited to now partner with the largest Indian multiplex chain PVR as this combines two proven business models and will create significant value for moviegoers as well as all the stakeholders.”

PVR’s revenue for the quarter ended 30 June stood at Rs 7 billion, up 7.2 per cent year-on-year over Rs 6.53 billion during the corresponding period last year.

Consolidated Ebitda for the quarter was Rs 1.41 billion as against Rs 1.31 billion in the same period last year, at a growth rate of eight per cent. Ebitda margin for the quarter was 20.2 per cent. Consolidated PAT for the quarter was Rs 520 million, up 17 per cent from Q1FY18’s PAT of Rs 440 million.