ZOO Lifts Full-Year Forecasts, Buys Indian Subtitling and Dubbing Provider Vista

Media Localization Company Zoo Digital Aquires in India and Updates 2022 Outlook

UK-based media localization provider, ZOO Digital, is racking up quite the number of air miles. Having launched international hubs in Turkey and Korea, ZOO’s latest destination is India.

ZOO’s India launch was accompanied by the acquisition of localization services provider, Vista India. ZOO previously took a minority stake in Turkish provider ARES Media in November 2021 and acquired a majority stake (51%) in Korea’s Whatsub Pro in March 2022.

Announcing the acquisition on March 21, 2022, ZOO said Vista India will expand the company’s South Asia operations by offering “services across eight Indian languages and English, including dubbing, subtitling, artwork, and metadata localization services.” 

ZOO is acquiring Vista’s two Mumbai-based subsidiaries outright — Vista India Digitek Private Limited and Vista Tanweer Studios Private Limited — as well as a 35% share in California-based Vista India Digital Media Inc. ZOO described the latter as an “aggregation services business, which acquires the rights to Indian TV and Film assets for exploitation internationally.”

The deal will see ZOO pay a total of USD 6m, of which USD 4.1m will be payable upon completion (comprising USD 3.1m cash and USD 1m in shares in ZOO). The remaining USD 1.9m will be payable in three cash installments, one, two, and three years after completion.

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ZOO did not disclose the top-line revenues for Vista (beyond observing that the company had “a year of unprecedented growth”), but said the two Indian subsidiaries made a small before-tax loss — of USD 0.014m total — in the 12 months to March 31, 2021. Meanwhile, the California business made a before-tax profit of USD 0.263m in the 12 months to December 31, 2020.

ZOO also published a trading update a day after announcing the launch of ZOO India, on March 22, 2022. In it, ZOO said it expects full-year 2022 revenues to be at least USD 65m, up nearly 65% from the previous year, with adjusted EBITDA expected to be at least USD 6.5m, a 44% increase from the previous year.

The March update is an improvement on its previous one from January 2022, in which ZOO said it expects full-year 2022 revenues to be at least USD 57m.

India’s Vibrant Film and TV Industry

ZOO said it sees India as a “key growth market for TV and film localization and media services,” and pointed out that “India’s vibrant film and TV industry and the rapid adoption of streaming makes it a high growth and strategic market for ZOO’s clients.”

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ZOO CEO, Stuart Green, also noted that the number of video-on-demand (VOD) subscribers in the world’s second-most populous country is set to more than double to 224 million by 2026, while India’s OTT (over-the-top) market is expected to be worth USD 4.5bn within the same timeframe.

Vista was founded in 2012 and has been one of ZOO’s vendors since 2016, making it a logical base for ZOO’s India and South Asia operations. Vista is also an approved supplier to Apple and a preferred Apac partner of Netflix. Green said the acquisition is the “next step” in the companies’ partnership and will enable ZOO to “meet the needs of local and international content creators in 2022 and beyond.” 

Rajiv Raghunathan, who was Managing Director of Vista, will occupy the same role at ZOO India. Raghunathan said joining forces with ZOO will allow Vista to further its mission of helping “content creators reach the largest audience possible.” Vista’s Founder, Suri Gopalan, said the partnership “will provide a flow of Indian content to the rest of the world and international content into India.”

Shares in ZOO jumped around 5.6% from market open on the day the ZOO India launch was announced (March 21, 2022), and are trading 12.5% higher than the start of ZOO’s current fiscal year in April 2021. Shares have fallen roughly 6.2% since the start of January 2022 after doubling in calendar year 2021. The company’s market capitalization currently stands at around USD 138m.

ZOO is now well advanced on the acquisition / strategic investment trail and is also set to achieve significant organic growth in its current financial year. The company plans to press on with its global growth initiative and said further announcements of hub launches can be expected in 2022.

Looking ahead to full-year 2023 (FY23), ZOO said in the same trading update that it expects revenues to continue to grow, “albeit at a lower rate than that expected in FY22.”

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