Technicolor Buying Cinram3 Nov, 2015 By: Erik Gruenwedel
Deal based on coveted replication contracts with Cinram’s largest U.S. studio clients
Paris-based Technicolor had sought to acquire the North American replication and distribution of packaged-media (DVD and Blu-ray Disc) contracts of two major unnamed domestic studios. Instead it has agreed to acquire the North American disc manufacturing and distribution assets of fiscally-challenged Cinram Group — holder of the coveted studio contracts.
The purchase price is expected to be in the range of €35 million ($38.3 million) to €40 million ($43.8 million), at current exchange rates, and would be a cash transaction. The purchase agreement with Cinram is subject to shareholder approval as well as other customary closing conditions.
Toronto-based Cinram in 2010 lost one of its largest studio contracts when Warner Home Video announced it would not renew. At the time, 20th Century Fox Home Entertainment and Lionsgate represented Cinram’s remaining major studio clients.
Those two contracts, if concluded, would add in excess of €190 million ($208 million) in annual revenue, according to Technicolor.
The company said the expanded operating leverage of its packaged-media products activities could also serve to support other new customer additions in North America.
The transfer of studio contracts and assets to Technicolor could occur as early as this month.