SYDNEY — Carlton Communications’ American subsid Technicolor is making an A$33 million ($20 million) investment in Southern Star Duplitek, the CD and DVD pressing biz of Australian entertainment major Southern Star.
Investment by Technicolor, the world’s largest manufacturer and distrib of videos, CDs, DVDs and film prints, will be used by Southern Star to acquire competing Oz pressing business Pacific Mirror Image for $17 million. Technicolor will emerge with up to a 32% equity stake in the merged SSD-PMI business, which will have revenue of $60 million, and Technicolor has rights to up its stake in the future.
The deal “provides Technicolor with a strategic platform from which to access and serve growing markets in Australia and the Pacific Rim,” said Technicolor Group chief executive Lanny Raimondo.
“Technicolor’s commitment to Southern Star Duplitek is expected to grow over the coming years as we expand our manufacturing operations to accommodate a customer base that includes major Hollywood studios, international record companies and leading information and software providers,” added Southern Star executive chairman Neil Balnaves.
Hard times for cash cow
Duplitek has long been the cash cow of Southern Star, which, like other Oz majors, has been hard hit by the downturn in Euro demand for foreign programming. It has all but mothballed its film activities, steeply written down the value of its inventory and slashed staffing levels by 27%.
Southern Star has long been rumored to be a takeover target, with suitors last year thought to be Carlton and Endemol.
Last week, Southern Star merged its light entertainment and infotainment activities into a joint venture with Holland’s Endemol, giving it Australian and New Zealand rights to the Dutch major’s catalog, while Endemol will sell internationally all shows produced by the joint venture as well as Southern Star’s entire infotainment catalog.