Media and entertainment group Avusa said yesterday that its proposed acquisition of Universal Print Group and Hirt & Carter had passed a due diligence investigation and received regulatory approval in the two months since the deal was announced.

The company said on June 14 that it had signed a memorandum of understanding that paved the way for the acquisition of UPG and H&C from UHC Communications for R925-million.

Avusa said it had finalised a due diligence investigation to the "satisfaction" of the group.

The Competition Commission had approved the transaction with no conditions attached, the company said.

Avusa, the owner of The Times and Sunday Times, said the "formal agreement" was in the process of being finalised.

In terms of the proposed deal, the purchase consideration is based on a forward price: earnings multiple of 7.28 times, determined with reference to the warranted combined net profit after tax for UPG and H&C for the year ending June 30 2011 (the minimum PAT).

Avusa will issue 20.55million new shares to UHC Communications for R22.50 each. After the deal, UHC Communications will own a 16.5% stake in Avusa. The rest of the deal will be financed by R462.5-million in cash.