Wellspring Acquired by American Vantage6 Feb, 2004 By: Holly J. Wagner
Wellspring Media has been sold to entertainment and media company American Vantage Media Corp. (AVMC), a subsidiary of publicly traded American Vantage Companies, for $8 million in cash and notes, it was announcned by the two companies.
Wellspring's assets include a 1,000-title library distributed via its theatrical, home video, worldwide sales and direct response units (www.artfilmcollection.com and www.videocollection.com). As of Dec. 31, Wellspring's programming and film rights library had an audited net book value of $10.5 million; it was recently independently appraised at a value of $14 million, according to the companies. Wellspring's shareholders and employees were paid $8 million: $4 million in cash at closing and the balance in two-year notes.
With the new capital infusion, Wellspring will work to build its arthouse and wellness/spirituality catalogs, said Al Cattabiani, who will continue in his role as president.
“There's plenty of room in both of those things to grow just staying in those genres,” he said. “We're going to do more, and better, of the same. We are not going to make any big aesthetic change.” The company hopes to pursue some films screened this year at the Sundance Film Festival.
The company expects to maintain its offices and staff of 50 in New York and Los Angeles. Senior management will remain in place.
“In terms of what we actually do day to day, we don't expect any changes at all. By virtue of being better capitalized, we will be better at getting more and better product,” he said. “What we're thinking about now is, how do we bulk up our release schedule? How do we take a step up from the base we had formed?”
AVCS recently acquired the assets of Hypnotic Media, the producer of Fox's TV series “The OC” and “Terry Tate, Office Linebacker” for Reebok.
Hypnotic also has a library of a little less than 900 short films, which may surface as compilations or DVD bonus materials.
“The idea is, each of us brings something a little bit different to the party,” Cattabiani said.
“Wellspring provides us with three great assets: a first-class management team, a 1,000-film/DVD library and a worldwide distribution apparatus,” said Stephen K. Bannon, vice chairman of American Vantage Companies and head of the board of directors' acquisition committee. “Coupled with our recent acquisition of Hypnotic in TV/film and branded content production and YaYa in interactive gaming, we have the nucleus for an extraordinary company.”
For calendar-year 2003, Wellspring had audited revenue of $21.1 million and EBITDA of $4.3 million. Wellspring's 2003 net loss of $729,000 includes a one-time inventory obsolescence write-down of $575,000 related to its VHS films.