Visual effects company sells for $30.2 million
Visual effects company Digital Domain Sunday night confirmed it sale to Galloping Horse America and Mumbai-based Reliance Mediaworks for $30.2 million. Galloping Horse, based in Beijing, will take 70% and Reliance 30% of the financially strapped special effects company. A bankruptcy court judge is set to greenlight the deal at a hearing scheduled for Monday.
Galloping Horse and Reliance will acquire all the businesses of Digital Domain and Mothership including feature film and advertising visual effects, commercial production, studios in California and Vancouver, BC, Canada and a co-production stake in the feature film “Ender’s Game.” Partners will buy the assets free and clear with sale proceeds going to the bankruptcy estate and Digital Domain’s businesses will continue to operate normally.
The sale was the result of an accelerated bankruptcy auction held Friday. Digital Domain asked for a quick turnaround so its studio clients would not pull their feature vfx work, and it couldn’t have been much faster. The company filed for Chapter 11 on Sept. 11.
“This is a great day for Digital Domain,” said CEO Ed Ulbrich. “Our new partners have incredible strength and reach in the global entertainment marketplace. They are powerful strategic partners that understand our business and our clients’ business. Their support enables us to continue creating the highest quality entertainment and advertising and puts us in the strongest financial position that Digital Domain has ever been in. We are grateful to all of the bidders and couldn’t be more pleased with this outcome.”
In its statement Sunday, DD said Beijing Galloping Horse and Reliance MediaWorks have a combined enterprise value of more than $25 billion. It cited “complementary offerings and presence in multiple worldwide geographies strategic to the entertainment industry.”
“Digital Domain is a legend in the industry, known for its world-class quality of work and creative talent,” said Ivy Zhong, vice chairman and managing director of Galloping Horse.
Venkatesh Roddam, CEO of film and media at Reliance, said the company has had “a wonderful working relationship with Digital Domain over the years and we could not be happier to take it further.”
Galloping Horse and Reliance both had existing partnerships with DD. Beijing-based Galloping Horse inked a deal with DD earlier this year to co-produce and distribute “The Legend of Tembo,” the first feature from DD’s startup animation house.
A July 2011 DD-Reliance pact put DD’s visual effects facilities inside Reliance offices in London and Mumbai. The joint offices also worked on 2D-to-3D conversion. Digital Domain’s 3D conversion business, however, was severed from the visual effects business along with the animation studio. Those assets and other Florida ventures are part of the rump Digital Domain Media Group.
Reliance bought the former Lowry Digital in Burbank in 2010. That facility is among the leaders in film restoration and image enhancement, and such services might serve as a valuable complement to DD’s vfx offerings.
Later Reliance lent DD $5.42 million and that loan exposure caused Reliance stock to drop more than 7% when DD announced its bankruptcy.
(Jill Goldsmith contributed to this story)