Cinedigm Digital Cinema Corp. (NASDAQ: CIDM) and Technicolor today announced they have entered into a binding letter of intent for Technicolor to acquire the assets of Cinedigm’s physical and electronic distribution business, as well as to create a strategic software design partnership between the two companies.
The transaction is expected to close within 45 days, subject to the execution of definitive documentation. The arrangement is expected to provide superior service and value, with greater scale and functionality, to the combined studio distribution customers of each Company.
Technicolor will also become a strategic software design partner with Cinedigm, supporting the development of next generation entertainment industry software products to leverage the opportunities created by the rapidly accelerating global digital cinema conversion. The initial phase of the software partnership will commence with Technicolor’s global licensing of the Cinedigm digital distribution software platform. Additionally, the companies will evaluate opportunities to jointly market Cinedigm software products to Technicolor’s software customers in key existing and emerging territories worldwide.
On the delivery side, Technicolor will become the preferred content servicing partner for Cinedigm’s growing alternative content and independent film distribution business. The companies intend to expand their delivery agreement as Cinedigm’s content distribution business grows organically and through acquisitions.
Financial details of the deal and partnership were not released.
“Technicolor is the market leader and highly respected in the delivery business, with strong customer relationships both domestically and internationally that will allow Cinedigm to expand our software and content distribution businesses faster and more effectively,” said Chris McGurk, Chairman and CEO of Cinedigm. “Simultaneously, by providing Technicolor access to Cinedigm’s leading software and delivery tools like CineXpress, Technicolor will enhance its position as a global innovator and become an even stronger player in its core delivery business. This is a perfect strategic alliance.”
“We are particularly eager to partner with Technicolor’s strong management team,” continued McGurk. “Claude Gagnon, Curt Behlmer and Dave Elliott are highly respected executives and we look forward to working with them to grow our software business, as well as to expand our content distribution business.”
“This agreement re-emphasizes Technicolor’s commitment to investments in digital services,” said Frederic Rose, CEO of Technicolor. “This transaction will allow our Digital Cinema business to expand its market leading electronic distribution footprint while continuing to provide the highest level of quality and security to our studio clients.”
As part of the arrangement, Technicolor will purchase certain assets of Cinedigm’s feature and trailer distribution delivery business based in Chatsworth, CA.