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Fusion Capital buys stake in Nairobi evening paper

Xtra Publishers began operations in March and now has a circulation of 30,000 copies per day. Photo/FILE
Xtra Publishers began operations in March and now has a circulation of 30,000 copies per day. Photo/FILE 

Fusion Capital, a private equity and investment firm, has bought into the media industry by acquiring a minority stake in Xtra Publishing Limited, the publisher of a free evening daily newspaper, X News.

Fusion said it bought a 40 per cent stake for Sh125 million, which roughly values the media company at Sh313 million.

Xtra Publishing said that it will use the funds to improve its working capital, IT and editorial systems to support its business model that relies on increasing readership through offering free content to attract advertisers.

“The future for print media is free news, and the future for media as a whole is digital, web and SMS services. Companies are looking for an efficient and targeted way to promote their products and this is what Xtra will offer,” said Xtra Publishing chief executive Paul Marshall in a statement.

“The partnership with Fusion will go a long way in ensuring we realise our vision.”

The media company also said that it would invest in content that can be delivered through mobile phones, based on research that has shown that young readers prefer to access content via devices.

“The newspaper will be supported by online and mobile services targeted at the young professional demographic,” added Mr Marshall.

Xtra Publishers began operations in March and now has a circulation of 30,000 copies per day.

The investment in Xtra Publishing is the second deal for Fusion this year following its Sh245 million investment (debt and equity) in Gal Bakeries that was concluded in March.

Fusion joins 88mph, a venture fund, in investing in a local media company. The latter bought an equity worth $25,000 (Sh2.2 million) in news site ghafla back in September 2011.

Caterer San Valencia, Nakuru-based Grand Park Estates, Zetech College and Ushindi Feeds are other firms that it has invested in.

Newspaper circulation has been growing over the last few years but increase in cover price and preference for online platforms saw circulation decline in 2013.

Data from the Economic Survey 2014 shows that between 2013 and 2012, total circulation of English daily newspapers decreased by six per cent to 104 million copies from 110.6 million copies.

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