×
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.

More Digital

  • Amazon

    Amazon Blows Past Q1 Earnings Estimates With Record Profit of $3.6 Billion

    Amazon.com handily beat Wall Street estimates for profit for the first quarter of 2019 — reporting $3.6 billion net income, an all-time quarterly record for the ecommerce behemoth. Sales increased 17% to $59.7 billion in Q1, with net profit more than doubling in the first quarter to deliver earnings of $7.09 per diluted share. Analyst [...]

  • eOne Names Bill Wilson Senior VP

    eOne Names Bill Wilson Senior VP

    Entertainment One (“eOne”) has tapped Bill Wilson as Senior Vice President Digital Operations and Innovation, Music, the company announced today. Wilson will oversee all aspects of digital strategy across the company’s music business, including label service, talent management, music publishing and live entertainment, according to the announcement.  Wilson will be based in New York City and [...]

  • Jennifer Kaytin Robinson Someone Great

    'Someone Great' Director Jennifer Kaytin Robinson on Reimagining the Rom-Com

    Jennifer Kaytin Robinson, creator of the MTV series “Sweet/Vicious,” recently made her feature debut with “Someone Great,”  now streaming on Netflix. The film follows three friends as they navigate relationships and work in New York City.  Here, the writer-director opens up on reimagining the rom-com, and women changing the face of Hollywood. The three young [...]

  • Hulu-Logo

    Comcast Mulling Sale of Hulu Stake to Disney (Report)

    Comcast is holding talks with Disney to see if they can hammer out a deal to sell Comcast’s one-third stake in Hulu to the Mouse House — which would give Disney full control over Hulu, CNBC reported. The report comes a little over a week after AT&T sold its 9.5% stake in Hulu to the [...]

  • Cox Cable Testing a Form of

    Cox Cable Testing Gamer Network Service to Reduce Lag

    UPDATED: Cox Cable is testing a new “Elite Gamer Service” that is designed to speed up connections between gamers and games, but which the company says doesn’t prioritize internet use. The service began testing in Arizona this week and Cox tells Variety it plans to run the test for about three weeks. The $15 a [...]

  • Angie-Nwandu-The-Shade-Room

    The Shade Room, a Top Instagram Celebrity and Gossip Publisher, Unveils First Slate of Original Series (EXCLUSIVE)

    The Shade Room, a top Instagram-based media publisher focused on black culture, entertainment and celebrity gossip, is launching three new original series on the social platform. The five-year-old venture, the brainchild of entrepreneur Angelica Nwandu, runs one of the most highly engaged accounts on Instagram: @TheShadeRoom, which has 15.3 million followers (referred to as “Roommates”), [...]

More From Our Brands

Access exclusive content