You will be redirected back to your article in seconds

Cinedigm Sells Majority Ownership Stake to Hong Kong’s Bison Capital in $40 Million Deal

Cinedigm — landing a deal to bring in much-needed financing to pay down its debt — has agreed to sell majority equity ownership to Bison Capital, a Hong Kong-based investment firm.

Under the terms of the deal, Cinedigm will sell Bison Capital 20 million shares of Class A common stock for up to $30 million. (The company currently has about 11.8 million shares outstanding and a market capitalization of $24 million.) In addition, Bison Capital has committed to loan the company $10 million for additional working capital purposes within 60 days of the stock sale closing.

A significant portion of the cash from Bison Capital will go toward paying down debt. Cinedigm said it is advanced discussions with debt holders representing $50 million in debt to exchange their long-term notes for cash, stock or a combination of the two.

Cinedigm chairman and CEO Chris McGurk said the company expects to work with Bison Capital to continue to refinance or retire the remaining debt on the balance sheet.

“We think this is exactly what the doctor ordered for the company,” McGurk said. “We believe Bison Capital’s significant investment and potential additional refinancing and debt retirement will be a transformative event.”

Also Thursday, Cinedigm reported results for the quarter and full year ended March 31, 2017, its fiscal fourth quarter of 2017. For the fiscal 2017, revenue declined 13.5% to $90.4 million and the company posted a net loss of $15.5 million (versus a net loss of $42.1 million in the year-earlier period).

Both Bison Capital and Cinedigm see an opportunity to expand Cinedigm’s content distribution, digital cinema and over-the-top businesses into China, as well as launch Chinese OTT networks in North America. “Strategically, we think it’s an enormous move for the company. Part of the plan is to open the door into China, particularly in the digital space,” said McGurk, noting that Cinedigm controls a library of 52,000 independent films and TV episodes.

According to Bison Capital founder Peixin Xu, despite the rapid growth in China’s media and entertainment sector the country remains underserved in terms of content quality and diversity. “Through our investment, we will leverage Cinedigm’s content access and distribution capabilities to bring more premium, independent content into the China market,” he said in a statement. “Our long-term goal is to help build Cinedigm into a leading distributor of global content, as well as help the company unleash the residual value of the digital cinema equipment.”

Cinedigm currently operates three OTT channels in the U.S.: the Dove Channel, with family-oriented programming; CONtv, catering to Comic-Con fans with 2,500 hours of original programming, films and TV episodes; and Docurama, aimed at documentary buffs with over 1,200 titles. According to the company, the three channels currently have approximately 3.98 million app downloads, 797,000 registered users and 85,000 active subscribers. Cinedigm plans a fall 2017 launch for its fourth OTT channel — WHAM Network, a 24-hour news, information and entertainment channel for eSports and gamers.

Bison Capital, founded in 2014, focuses on media and entertainment, health care, and financial services industries. The firm has invested in 14 companies to date, including Bona Film, a Chinese movie production and distribution company and movie theater operator; Hua Sheng Tai Tong TV Production, a TV production company in China; and Xunlei, a Chinese downloading service and entertainment portal operator.

With the investment, Bison Capital will be entitled to designate two additional members to Cinedigm’s board, expanding the board to seven members.

Cinedigm will hold a stockholders meeting in the third quarter of 2017 to seek approval for the Bison deal. Regions Securities acted as financial adviser and Kelley Drye & Warren LLP acted as legal counsel to Cinedigm. Shearman & Sterling LLP advised Bison on the transactions.

Popular on Variety

More Digital

  • Comcast X1 DAZN

    Comcast Adds DAZN Sports-Streaming Service to Xfinity Flex, Sets Launch on X1

    DAZN, the digital sports service headed by ex-ESPN boss John Skipper, is now available to Comcast broadband customers on Xfinity Flex and will be available on Xfinity X1 this fall. It’s the first distribution deal for DAZN with a major U.S. provider since it debuted the combat-sports-oriented service in the States a year ago. In [...]

  • YouTube logo

    YouTube Raises Bar for Channel Verification, Stripping Some Creators of Verified Status

    YouTube is making it harder for channels to receive a verification badge indicating their authenticity — and the program’s new requirements mean that some channels won’t be eligible for verification. Like other internet platforms, YouTube indicates to viewers that specific channels are officially run by the creator, artist, celebrity or company they represent with an [...]

  • BuzzFeed - Katie Sitter

    BuzzFeed Taps Activision Blizzard's Katie Sitter as Head of HR (EXCLUSIVE)

    BuzzFeed hired Katie Sitter, most recently an HR exec at Activision Blizzard, as senior VP of people. Sitter, who starts at the company Sept. 30, will lead the BuzzFeed HR organization and oversee strategic initiatives related to organizational planning, talent acquisition, learning and development, performance management, compensation and benefits, labor relations, and diversity, equity, and [...]

  • Kano

    Kano Tipped to Launch ‘Star Wars,’ ‘Frozen’ Coding Kits

    Educational consumer electronics startup Kano is getting ready to release “Star Wars” and “Frozen” coding kits, according to regulatory filings. Recent FCC filings made by the company reveal plans to release a product called “The Force Coding Kit” as well as one called “The Disney Frozen Coding Kit.” Kano representatives didn’t respond to multiple requests [...]

  • Apple Arcade

    Apple Officially Launches Apple Arcade Game Subscription Service

    Apple officially cut the ribbon for its new game subscription service Thursday: Priced $4.99 per month, Apple Arcade offers unlimited access to over 100 exclusive games. Apple Arcade was released alongside iOS 13, the latest version of Apple’s mobile operating system. Some of the titles available through the subscription package include “Lego Brawls” from Lego [...]

  • Kim Kardashian Kim Kardashian out and

    Nielsen Now Tracks Celebs' Social-Media Touts of TV Shows

    Nielsen is providing a new lens into how celebrities and talent can boost the exposure of TV shows on social media. The measurement company announced that its Social Content Ratings solution now measures talent promotion of television programs across Twitter, Facebook and Instagram. According to Nielsen, talent now drives nearly 60% of all social engagement [...]

More From Our Brands

Access exclusive content