Postprod systems maker had recent losses
U.K. media group Carlton Communications said Thursday that it’s accepted a management-led buyout of its Quantel Ltd. digital equipment unit for a bargain-basement £51 million ($76.6 million).
Quantel, headquartered in Newbury, England, with a Darien, Conn.-based subsidiary, makes editing systems and other devices for post-production companies in Hollywood and elsewhere. Company has been plagued by recent operating losses amid tough times in the post industry.
Lloyds TSB Development Capital is financing the management-led buyout. According to terms of the deal, Carlton could get up to another $86 million in cash under certain conditions, including the future sale of the company by the investment firm.
Bloomberg News reported Carlton also will be in line for additional payments if Quantel is returned to profitability and in any event will keep certain fixed assets worth $27 million. A U.S.-based Quantel spokesman said he had no information on those details.
London-based Carlton is set for merger with another U.K. media group, United News & Media, and has placed its North Hollywood film-processing unit, Technicolor, up for sale. Technicolor suitors are said to include the Bain Capital investment firm (Daily Variety, June 27).
Carlton, whose broadcasting interests include a big stake in the U.K.’s commercial Independent Television Network, previously sold off its Solid State Logic audio equipment business.
Post industry observers said management at Quantel will be re-assuming the reins of the company, just over a decade after its takeover by Carlton, at a tough time. Competition in the equipment marketplace demands ever-better performance at static price points, even as the rollout of equipment for high-definition television post-production is hampered by confusion over conflicting engineering standards, insiders said.
“The (Screen Actors Guild) strike can’t be helping either,” one sideliner observed. “If there’s not a lot of commercial work going on, the post houses are challenged a little bit.”
Still, Quantel’s engineering prowess is its strong suit, and its long-standing strategy keys on potentially lucrative higher-end segments of the post equipment marketplace.
“Even in difficult economic times, there are always people who will buy Aston Martins and Rolls Royces,” an industry observer mused. “At least that seems to be their thinking at Quantel.”