Monday, January 05, 2009
By Erik Gruenwedel | Posted: 20 Nov 2008
Image Entertainment has entered into a definitive merger agreement with private investment group Nyx Acquisitions, in a cash transaction worth about $100 million.
Under the deal, which includes assumption of Image’s outstanding debt under its credit facility, replication advance obligation and convertible note, Image shareholders will receive $2.75 per share in cash.
This amount represented nearly a 300% premium to the Chatsworth, Calif.-based distributor’s closing share price Nov. 20 of 69 cents.
Image’s board unanimously approved the transaction and recommended shareholders vote in favor as well. At deadline, 38% of shareholders had agreed to the deal, which is expected to close in the first quarter of 2009.
Nyx is a subsidiary of Q Black Media based in San Francisco and headed by co-founder and CEO Joe Bretz.
Q Black is apparently no stranger to the film business, having partnered separately with actor Rob Schneider (Deuce Bigalow, The Hot Chick) and Deviant Films (This Girl’s Life, Dirty, The Last Word) to produce independent feature films, according to Image.
The company’s business portfolio also includes nightclub development, real estate and technology development units.
Image, which this year began aggressively marketing cast-driven feature films, has seen its business and bottom line rise appreciably.
“We have been successfully executing the business plan we put in place about a year ago and by doing so developed a strong and healthy business, which obviously kept potential suitors interested,” David Borshell, president of Image, said in a statement.
Image CFO Jeffrey Framer said he believed the distributor’s management, DVD and digital distribution businesses were part of the attraction to Q Black.
“The buyer likes the fact he can leverage our complete infrastructure and own the distribution waterfall,” Framer said. “It sounds like a terrific marriage.”
He said Q Black specifically would incorporate its technology expertise into Image’s emerging Egami Media digital unit.
The CFO, however, remained mindful of a previous failed $130 million merger attempt by BTP Acquisition Co. in 2007 that resulted in litigation.
“We still have two months to go, but we are very thrilled,” Framer said.