Once-Powerful Indie Player Wild Bunch Seeks a White Knight

Wild Bunch is teetering on the financial brink as it tries to restructure its debt, raise capital, deal with an exodus of high-level executives and shore up its once-promising TV unit and flailing distribution activities, multiple sources say.

Over the past couple years, the flamboyant European powerhouse has been able to weather a growing financial storm and continue backing prestige movies thanks to its reputation and the help of friendly lending institutions. But it has recently taken steps to find a buyer to acquire the company in full or in part, and/or to sell some assets. It will have to do so within the next four or five months to stay afloat, an industry source close to Wild Bunch tells Variety, adding that two investment funds that specialize in turnaround situations are now circling the company.

Wild Bunch, headed by Vincent Grimond, Vincent Maraval, Brahim Chioua and Max Sturm, declined requests for comment.

The company was founded in France 15 years ago and merged with Germany’s Senator in 2015. It has been listed by Lazard, a private Paris bank, for more than a year. Officially, Wild Bunch hired Lazard to raise equity capital, but multiple sources confirm that the bank put Wild Bunch on the market. Despite remaining a leading purveyor of award-winning films such as Cannes Jury favorite “Loveless” (pictured), Wild Bunch has proven a tough sell because of its debt, which stood at €74.7 million ($88.1 million) at the end of June, on a par with last year. Its market capitalization of $24.7 million on Dec. 11 was not far from its all-time low, and its stock price has dropped 66% since mid-January. The company is also saddled with large overhead costs stemming from its multiple subsidiaries in France (Versatile, Elle Driver), Germany (Wild Bunch Germany), Italy (BIM) and Spain (Vertigo), with a total of about 150 employees.

Wild Bunch’s financial report for the first half of 2017 shows revenues fell slightly to $56 million from $59 million last year. Gross profit margin reached 24.4%. But over that period, the company’s financial costs, such as interest fees, nearly doubled from the year before, to $8 million. Wild Bunch ended the term with very little cash flow, having started the year with $24.1 million and investing $23.4 million, mainly in film rights, the report said.

In France, Wild Bunch is backed by prominent lending institutions Coficine and, to a lesser extent, Cofiloisirs. In April, the company also signed a credit facility agreement with Leumi bank in London for a revolving credit line of $35.3 million — two-thirds of which it took out in July. The credit line was set up to allow Wild Bunch’s German, Italian and Spanish subsidiaries to repay some debts and finance acquisitions.

Wild Bunch has since boarded several ambitious films, including animated adventure “Foxy Trotter,” produced by Natalie Portman; Eva Husson’s “Les filles du soleil,” about female resistance fighters; and “The Translators” with Olga Kurylenko. The company has also released mainstream French comedies, but none has proven a box office hit. A financing executive familiar with Wild Bunch says “none of the eight films it released in France in the first half of 2017 broke even.” In its financial report, the company acknowledged that “lower cinema revenues” had affected its bottom line and that “the success of theatrical releases remains an important component of the revenue and profitability of the group.”

Wild Bunch’s TV unit, launched in September 2015, appears to be on shaky ground as well after a promising start. It handled international sales on the first season of “Medici: Masters of Florence,” but lost rights to the second season to Beta Film. The TV unit also failed to get the international sales mandate for “The Name of the Rose,” an Italian series based on Umberto Eco’s novel. An Italian source said Wild Bunch was rejected because it had not provided sufficient financial guarantees to the production banner, Palomar.

Both the film and television divisions have lost key executives. Carole Baraton, who launched the TV unit and was also head of international sales for films, exited in 2016. She was replaced by Eva Diederix, co-founder of Elle Driver. Thomas Triboit, head of acquisitions for the TV division, recently resigned and will soon leave the company.

On the film side, Thierry Lacaze, head of distribution in France, left in September for a job at Studiocanal and was replaced internally by veteran Wild Bunch staffer Jérôme Rougier. More recently, international sales manager Emilie Serres resigned and will soon leave. And last week saw the resignation of Wolf-Dieter Gramatke, the Hamburg, Germany-based chairman of Wild Bunch’s supervisory board.

Wild Bunch’s plans to expand beyond Europe have struggled. During the last quarter of 2016, the company planned to take a majority share in Transmission Films to start direct distribution in Australia and New Zealand, but the deal never materialized because Wild Bunch reportedly failed to secure the financing to complete the transaction. Wild Bunch owns a 45% stake in IMR, an L.A.-based sales banner launched by Maraval in May 2015 that was originally known as Insiders before it consolidated its sales operations with MadRiver Pictures.

Now Wild Bunch is seeking a white knight. But whether one can be found that would maintain its taste for provocative, auteur-driven films and its unconventional ways of doing business remains to be seen.

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