Complements last year's purchase of Sidus
SEOUL — Locus Holdings, an affiliate of a deep-pocketed computer telephone systems integrator of the same name, has acquired South Korea’s premier film financier/distrib. A signing ceremony was held March 6.
The agreement to buy Cinema Service complements Locus’ purchase last year of Sidus Entertainment, a leading film and music production company. Those involved in the deal say it will lead to a new level of professionalism for the nation’s entertainment biz.
“It will definitely help to corporatize the industry,” says Sean Lee, a Korean rep for global venture investment firm Warburg Pincus, which last April took a 35% stake in Cinema Service. Warburg’s shares have been converted to 26% of Locus Holdings.
Locus itself is valued at 91.5 billion won ($70 million) with 33% now owned by Cinema Service founder Kang Woo-suk and his associates. It is not yet known whether the agreement will lead to further consolidation in the industry.
One independent producer says he’s not sure whether the deal is good or bad for the movie industry.
Clearly, though, for Cinema Service and Sidus, the deal provides more money to play with. “We need more funds,” said Kang at the signing ceremony. “Nowadays the market for Korean films is beyond Korea. That’s why we need a bigger funding system for the Korean film industry.”
Sidus film topper Tcha Sung-jai says the deal means his company can produce more and better quality. “Thanks to the investment we are able to produce better quality films for Asia. What this event means is I can produce more films.”
Michael Kim, president of Cinema Service says, “We believe Locus is most prepared in terms of technology.” He and others see video-on-demand on the near horizon.
Recently, Internet penetration in South Korea crossed the 51% mark, with the nation having one of the highest usage rates for broadband connections.