Image Entertainment Up for Sale?29 Mar, 2012 By: Erik Gruenwedel
Image Entertainment reportedly is in talks to be acquired by billionaire Bob Johnson, founder of BET (Black Entertainment Television).
The transaction still isin negotiations and weeks away from being finalized, according to The Wrap, which cited a source familiar with the deal.
Chatsworth, Calif.-based Image, which is owned by San Francisco-based investment group JH Holdings, has a portfolio of more than 3,700 movie and TV show titles distributed on disc, electronically and television.
Notable brands include The Criterion Collection, blue collar comedy and select African-American catalog titles and music tracks.
In 2009, Image signed a multiyear deal with BET International to repurpose its entire urban catalog for broadcast in the United Kingdom and Africa. Titles, which range from feature films and documentaries to comedies, included Jamie Foxx Unleashed, Letter to the President, Notorious B.I.G. Bigger Than Life, Love for Sale and Tupac Shakur: The Life of an Outlaw.
Image is headed by CEO Ted Green, who in 2010 inked a high-profile distribution agreement with Sony Pictures Home Entertainment. It also distributes George Harrison’s Handmade Films, New Films International, One Village Entertainment and Madacy Home Video titles.
In addition to Green, Image executives include COO John Hyde and CFO John Avagliano. Industry veteran Mark Ward is VP of acquisitions, working on chief acquisitions officer Bill Bromiley’s team; senior sales executive Ray Gagnon; and Alan Fergurson, formerly VP of consumer products and home entertainment with MTV Networks.
Image posted net income of $763,000 on revenue of $34.5 million during its most recent fiscal period ended Dec. 31. It said the 25% revenue gain was due to increases in sales of disc, digital and broadcast content. Specifically, disc revenue (which included DVD and Blu-ray titles) increased 10.7% to $27.9 million, from $25.2 million.
Johnson, who owns the Charlotte Bobcats NBA franchise, sold BET to Viacom in 2003 for $3 billion.
Image, which employs about 75 people, has a checkered history with mergers and acquisitions. In 2009 it terminated merger talks with Nyx Acquisitions following protracted negotiations that resulted in the payment of $2.5 million in business interruption fees to Image, and, in a related manner, the departure of top executive David Borshell.
In 2006, Image rebuffed efforts by Lionsgate — then its second largest shareholder — to elect a board of directors slate with a mandate to approve the minimajor's $4 per share acquisition offer. When the slate wasn't elected, Lionsgate sold its shares prompting much of Wall Street to turn its back on Image.
With its stock freefalling, Image entered into the first of a series of shaky merger attempts, including a 2007 deal with investment group BTP Acquisition led by producer David Bergstein. That failed pact was followed by the equally doomed Nyx deal, leaving Image near bankruptcy.
An Image representative was not immediately available for comment.