Cinram Sale Earns U.S. Court Approval30 Jul, 2012 By: Chris Tribbey
A U.S. bankruptcy court has approved the sale of Cinram to a private equity firm in Arizona, clearing the way for the reported $82 million-plus acquisition to be completed in August.
Cinram, which supplies and distributes discs for 20th Century Fox Home Entertainment, Relativity Media and others, agreed in June to sell most of its assets to Najafi Cos., owner of Direct Brands, SkyMall and Trend Homes. The acquisition is not expected to impact Cinram's day-to-day operations.
“Najafi will purchase substantially all of the assets used in Cinram’s core businesses for the manufacture of pre-recorded multimedia products and the provision of related logistics services, digital media solutions and outsourced vendor management inventory services in North America and substantially all of the European business,” Cinram announced in a press release.
Najafi, which made headlines in 2011 after its unsuccessful bid to acquire Borders Group, will continue to operate Cinram’s North American facility in Olyphant, Penn., according to court documents. However, according to The Times-Tribune in Scranton, Penn., the acquisition only gives Najafi ownership of the Olyphant facility’s machinery, inventory, contracts and permits, and not the facility itself.
In a letter to Jahm Najafi, CEO of Najafi Cos., Sen. Bob Casey (D-Pa.) expressed hope that Najafi would not cut any of the 500-plus employees currently working for Cinram in Olyphant.
“Cinram’s 500 workers have an excellent track record of productivity and achieving results that should be an asset to any owner,” Casey said. “I’m hopeful that as Najafi Cos. transitions to an ownership stake in Cinram that they will realize the first class nature of our region’s workforce and keep jobs at the plant.”
A victim of declining demand for physical disc, Cinram posted a net loss of $25.5 million for the first quarter of 2012, and was delisted from the Toronto Stock Exchange July 16.