HBO invests in Australia’s Quickflix

Premium television company HBO has agreed to invest A$10 million (€8.2m) for a strategic stake Australia’s leading online movie rental company Quickflix. Quickflix recently announced that it had entered into a licensing agreement with HBO for the streaming of TV series and films in Australia.

Under the terms of the deal, HBO will invest A$10 million in Quickflix in exchange for 83.3 million preference shares at a price of 12 cents per share which are convertible to ordinary shares in the Company equating to a fully diluted interest of 15.7 per cent on conversion. HBO will appoint a representative to the Quickflix board. The investment, which is fully endorsed by the Quickflix board, is subject to shareholder and ASX approval.

The board of Quickflix recommends that shareholders vote in favour of the investment by HBO and intends to vote any shares held by them in favour of the investment by HBO.

Quickflix Executive Chairman and Founder Stephen Langsford welcomed HBO as a strategic investor in the Company, and noted that Quickflix was achieving strong subscriber growth and was rapidly rolling out its streaming service. “The funds from HBO’s investment will enable Quickflix to execute its strategy for growth and profitability,” he stated.

The 12 cents per share investment in Quickflix represents the 52-week high for the stock, which listed at 20 cents a share in June 2005 with a market capitalisation of A$3 million. The stock’s market value isA $42.4 million, which will be lifted to $5A2.4 million once HBO’s equity stake is included.

Quickflix recently announced strong growth in the December quarter,with a 17 per cent increase in paying subscribers to 94,097 and a 15 per cent rise in quarterly revenue to A$4.3 million.

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