Cinedigm to Acquire New Video19 Apr, 2012 By: Chris Tribbey
Cinedigm Digital Cinema Corp. announced April 19 it will acquire independent distributor New Video Group Inc. for $14 million, with the deal worth as much as $20 million throughout three years, depending on Cinedigm’s future financial results.
The acquisition by Cinedigm makes it a full-service, end-to-end digital releasing studio, giving it the ability to acquire and distribute independent films and specialty content both theatrically and in the home entertainment space.
New Video and Cinedigm already had formed an acquisition and distribution partnership for independent films in January, and already have acquired three films: Invisible War, Citadel and In Our Nature.
“Over the past year, we have analyzed many companies in the digital distribution space for home and mobile entertainment and determined that New Video is the best partner for us,” said Cinedigm chairman and CEO Chris McGurk. “[New Video’s] tremendous success in the ever-evolving digital space, combined with their expertise in content acquisition, sales and marketing and distribution of traditional packaged goods, puts them clearly ahead of the pack.”
The deal calls for Cinedigm to pay $10 million in cash and $4 million in Cinedigm stock.
New Video’s Susan Margolin and Steve Savage will become co-presidents of Cinedigm’s Entertainment Group, which will include New Video as well as Cinedigm’s pre-existing theatrical marketing and booking services. They will report to McGurk. Aimee Connolly, New Video’s chief operating officer, will take on the same role for Cinedigm Entertainment Group.
“This combination creates a very powerful distribution machine at a time when the industry is at the crossroads of profound change and real strategic opportunity,” Savage said. “Cinedigm is the perfect partner for expanding the market for feature film and entertainment content, while exploiting every opportunity for innovation in VOD, digital and mobile distribution.”