Prominent investors are merging their businesses — including a Spanish-language cable movie channel and a Puerto Rican television network — to form a new public company to be known as Hemisphere Media Group.
Investment groups InterMedia Partners VII and Los Angeles-based Azteca Acquisition Corp. said they have agreed to combine their Spanish-language properties and financial resources in a transaction valued at $400 million.
Gabriel Brener, a wealthy Los Angeles investor, is contributing the $100 million that Azteca Acquisition, his special-purpose acquisition company, raised in its initial public offering in 2011. Since then, he and his group have been on the hunt for investments in media.
"We have looked at 80 different companies in the last year and a half but none was a perfect fit," Brener said in an interview. "Combining with InterMedia, we thought, made the perfect match."
InterMedia's Spanish-language media assets — the CineLatino movie channel, which is available in 12 million homes in the U.S., Canada and Latin America; television station WAPA in Puerto Rico; and the WAPA America cable network, also in Puerto Rico — will form the backbone of the new venture, which is expected to go public in April.
InterMedia Partners, which was founded by Leo Hindery, an influential cable television executive who started the New York Yankees' YES Network, will control 73% of Hemisphere Media. Brener and other investors in his Azteca Acquisition will hold 27%.
Brener separately co-owns the Houston Dynamo Major League Soccer team with AEG and boxing great Oscar de la Hoya. In the late 1980s, Brener and his brother acquired the Boys Markets grocery chain in Southern California, rebranded some stores as Viva Markets and later sold the markets to Ron Burkle's Yucaipa Co. Brener's family has business holdings in Mexico.
The new company, Hemisphere Media, has ambitions to become a major player in Spanish-language TV, which currently is one of the hottest tickets in media.
Major media companies including Rupert Murdoch's News Corp., Time Warner Inc.'s CNN and Walt Disney Co.'s ABC News have been building programming services to appeal to Latinos in the U.S. Advertisers are spending more money on Spanish-language and bilingual networks, and media conglomerates want to capitalize on the interest and surge in revenue.
"The space is so big, dynamic and fluid -- and there are lots of opportunities," said Alan Sokol, senior partner at InterMedia, who will become chief executive of Hemisphere Media.
Sokol and Jim McNamara, co-owner of CineLatino, helped build the Spanish-language Telemundo network, now owned by NBCUniversal.
Hemisphere Media will be based in Miami, which also is home to Spanish-language television giant Univision Communications and Telemundo.
Sokol said the company will look toward other acquisitions in Spanish-language media, particularly niche cable channels. It plans to expand its footprint in the U.S. and Latin America. Brener is expected to stay involved.
"For many years we have identified the power of Latino market," Brener said. "Latinos, Mexican Americans, are a force to be reckoned with — and they are here to stay."