Advanced digital video services global provider Avail-TVN has secured $100 million of new investment funding from global alternative asset manager The Carlyle Group enabling it to acquire UK-based On Demand Group, a provider of video on demand services to some of the biggest television brands outside of the United States. Avail-TVN paid $27 million on a cash-free, debt-free basis.
Carlyle joins existing Avail-TVN investors including Columbia Capital, Valhalla Partners, Novak Biddle and Pioneer Ventures. Equity for the investment comes from two Carlyle funds: Carlyle US Growth Fund III and Carlyle Europe Technology Partners II. Debt funding is provided by Silicon Valley Bank, RBS Citizens, N.A. and Bank of America, N.A. With this investment, Carlyle is now Avail-TVN’s largest investor.
Avail-TVN will use this investment to fund international expansion and the development of new products and services for the company’s global client base of content providers and multichannel video service providers. The first investment from this new financing, the acquisition of On Demand Group from SeaChange International, expands Avail-TVN’s reach to more than 25 countries, serving more than 70 million households globally. Major markets include North America, the Caribbean, Latin America, Europe, Middle East and Asia.
“Our strategy has been to invest in leading players across the digital media ecosystem and incorporate them into one company to build Avail-TVN into the largest provider of advanced digital video services worldwide,” said Ramu Potarazu, Avail-TVN’s chief executive officer. “The Carlyle Group’s investment supports that vision, and provides the capital and global network to build upon this foundation both domestically and internationally. “With the integration of On Demand Group, we broaden our capabilities, extend our distribution and are able to further develop monetisation opportunities for our customers in the rapidly-changing digital media space.”
“The market opportunity for Avail-TVN continues to grow,” said Phil Herget, Avail-TVN’s chairman. “With new partners on board and an expanded global reach, the company is poised to capitalise on trends and generate revenue across the video value chain.”
On Demand Group will continue to service its customer base of leading broadband, television and mobile service providers. The company provides transactional video offerings to operators in 20 countries. Merging the two companies brings together a diverse customer base, strong content relationships with leading entertainment and media companies around the globe, highly developed and proven workflow and delivery systems, a wealth of entrepreneurial management talent and the finance and scale to drive aggressive revenue growth. Tony Kelly, CEO at On Demand Group, will now report to Avail-TVN CEO, Ramu Potarazu, and serve as a member of the executive management team.
“We see tremendous revenue value creation opportunities in the global digital media space as technology continues to revolutionise the way consumers access premium video entertainment,” said William Darman, principal, The Carlyle Group. “Avail-TVN is an innovator helping organisations across the value chain to continue to monetie video content in new ways and this joint investment by The Carlyle Group’s US and European growth funds is testament to the growth prospects we see in this sector over the coming years.
“With the addition of the On Demand Group, Avail-TVN becomes the largest provider of digital video in the world, reaching more households in more countries than any other company in the space,” said Will Smales, associate director, The Carlyle Group. “As the digital video market continues to evolve and mature, the company is poised to capitalise on opportunities around the globe.”
SeaChange confirmed at the end of March that it was intending to sell the On Demand Group. It had earlier announced it was selling its broadcast server and storage business to focus on its core software and services operations, including its next generation back office, video streamers, gateway software and advertising solutions.
SeaChange CEO Raghu Rau said the sale was part of the ongoing execution of its strategy to transform SeaChange into a pure-play software company, while generating significant cash for its business and improving shareholder value. “As the sale is to a strategic buyer, the combination of Avail-TVN and On Demand Group creates a global media services powerhouse, which also presents a significant customer opportunity for SeaChange,” he added.
“We can now focus our efforts on strengthening our competitive advantage in delivering next generation multi-screen video software solutions to cable, IPTV and mobile operators worldwide; serving our growing customer base, which includes all major cable operators in the Americas and Europe, and the largest telecom companies in the world; and aggressively driving revenue growth through our core software and services operations including our next generation advertising, back office, video streamers, and gateway software solutions,” he said.
Potarazu said that together, Avail-TVN and On Demand Group reached more homes in more countries than any other provider in the market.
Kelly noted that the On Demand Group managed VOD content and services on 26 platforms in 20 countries, handling one billion VOD transactions each year in 14 different languages.