New entity to be called RLJ Entertainment
BET founder Robert Johnson, chairman of The RLJ Companies and one of the nation’s most successful media entrepreneurs, is acquiring Image Entertainment and Acorn Media Group, creating a major independent distributor of niche video content worldwide.
“Investors expect you to come to the market with companies that are exciting, have a good growth strategy and superior management, and Image and Acorn are exactly that,” Johnson told Variety. He expects the combined company to thrive in a content-hungry digital world and to become a key distribution outlet for minority producers.
“It will be very transformative for minority producers, being able to get guaranteed financing based on the distribution delivery system. We think we can create a model, particularly in low-cost digital productions. I am very excited about that,” said Johnson, an iconic figure in the African-American community.
The Image and Acorn brands, which each have a strong following, will remain distinct within a new publicly traded company called RLJ Entertainment with shares listed on the Nasdaq exchange. Johnson’s RLJ group is a collection of businesses in entertainment, finance, real estate, resorts and insurance. In 2006 it launched Our Stories Films, the first African-American owned studio.
Johnson will be executive chairman of the new company, Acorn founder Peter Edwards vice chairman, and Image topper Ted Green chief executive.
Image is strong in urban, independent film, comedy and horror with brands like BET on Jazz, Criterion Collection, HandMade Films, Lakeshore Entertainment, Slingshot Pictures, PS Classics and One Village Entertainment. Acorn has had British drama pretty well sewn up for years. Last month, it acquired rights to a majority of Agatha Christie’s literary estate.
“I think the whole idea is to do genres and niches. … We think we can fit these together and by being distribution agnostic can really expand,” said Image’s Green. “The brands will stay separate but we will get some synergies of talent and resources.”
He said the new company may loook to acquire digital distribution assets.
Image is private. Acorn trades on the over-the-counter, or OTC, market for small cap stocks. Deal calls for common stockholders of Image Entertainment to receive 2.14 million shares of the new RLJ Entertainment. Holders of preferred stock will get $22.6 million in cash.
San Francisco private equity firm JH Partners is the largest owner of Image, Green the second. He said current management and partners will roll their interests into the new company.
Image holders will own about 11% of RLJ Entertainment when the deal closes, which Johnson said will take about six months.
Acorn Media shareholders will receive $105 million in cash, one million shares of RLJ Entertainment and warrants to buy another million shares. They will own about 5% of the new company.