Payment for the stake will be made with the issue of new DDH shares. Following the deal Prime Focus will hold 3.5% of DDH.
The two groups say that they will then seek to launch a new joint venture in India spanning post-production and visual effects.
Prime Focus and Digital Domain Holdings became involved when India’s Reliance MediaWorks and China’s Galloping Horse in 2013 together bought the insolvent U.S.-based Digital Domain. The Relaince MediaWorks businesses were subsequently sold to Prime Focus. And Galloping Horse sold its majority stake in Digital Domain to the new Digital Domain Holdings, which is listed on the Hong Kong Stock Exchange.
Reflecting the series of corporate changes, the company currently called Digital Domain-Reliance LLC was formerly known as Galloping Horse-Reliance, LLC and Galloping Horse America, LLC. It also includes DD Opco, Digital Domain Production and Mothership Media.
Digital Domain-Reliance last year lost US$5.78 million (HK$44.8 million,) compared with losses of US$4.44 million (HK$34.4 million) in 2014.
The planned new joint venture in the Indian businesses will see DDH pay US$25 million for a 50% stake in Prime Focus’s U.K. registered subsidiary De-Fi, operating in Indian post production and visual effects services to the advertising, animation and virtual reality industry in India. The payment would be made with a further issue of DDH shares.