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Cinedigm Acquires Gaiam Vivendi Entertainment

17 Oct, 2013 By: Erik Gruenwedel

Cinedigm ups position as top independent home entertainment distributor following $51.5 million acquisition. Gaiam Vivendi president Bill Sondheim to head combined venture

Cinedigm Oct. 17 took the pole position among independent home entertainment distributors when it agreed to acquire Gaiam Vivendi Entertainment (GVE) for $51.5 million. GVE president Bill Sondheim becomes president of the combined Cinedigm Entertainment Group.

Gaiam Vivendi has multi-year relationships with myriad content suppliers, including WWE, NFL, Hallmark, National Geographic, Discovery, Scholastic and The Jim Henson Co. It also has key direct sales and marketing relationships with most major physical and digital retailers, including Walmart, Target, iTunes, Netflix and Amazon.

Boulder, Colo.-based Gaiam retains its health and fitness business, which includes packaged media workout videos by Jillian Michaels, among others.

Los Angeles-based Cinedigm said the acquisition would add $15 million in annual pre-tax earnings on combined (with GVE) revenue of $320 million. Cinedigm posted a loss of $7 million on revenue of $19.3 million during its most recent fiscal period. The loss was due in part to $2.6 million in theatrical acquisition, marketing and related releasing costs. Since March, Cinedigm has released 10 movies theatrically, acquired 676 titles for its library and expensed the upfront investments in related marketing and distribution costs.

"This acquisition gives Cinedigm immediate scale and leverage across the entire entertainment value chain,” said Cinedigm CEO Chris McGurk in a statement.

Sondheim said he has known McGurk for years, having worked for him previously at PolyGram Entertainment.

“Cinedigm’s digital platform, film releasing business and emerging networks initiative, enhanced by GVE's direct physical goods, digital platform, retail relationships and brands, will make CEG an even more powerful and unique competitor in our evolving industry,” Sondheim said.

McGurk said the combination of Cinedigm and Gaiam Vivendi Entertainment includes a library of more than 32,000 titles and episodic programming featuring independent films, TV series and related content. The combined distributors also have a physical retail footprint covering more than 60,000 retail locations.

Cinedigm earlier this year launched an ad-supported over-the-top streaming platform featuring documentaries, including Oscar-nominated The Invisible War.

"This accretive acquisition fully complements our existing businesses, while providing immediate scale, [pre-tax earning], cash flow, cost and revenue synergies, strong new management and tremendous opportunities for further growth," he said.

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