Cinedigm closes acquisition of DMR
March 30, 2022
Cinedigm, a streaming technology and entertainment company, has closed the acquisition of Digital Media Rights (DMR), a specialty streaming, advertising, and content distribution company.
The acquisition closed on March 28th with a purchase price of $16.4 million (€14.7m), payable in instalments. The company paid the first payment of $8 million in cash at closing, which was funded with cash on hand. Cinedigm will make additional payments totalling $8.4 million in cash or stock at the Company’s discretion. Cinedigm will pay annual instalment payments of $3 million, $3 million and $2.4 million at 12, 24, and 36 months from the closing date, respectively.
Cinedigm expects the acquisition will generate approximately $10 million in incremental revenue and $3 million in incremental Adjusted EBITDA over the next 12 months.
The acquisition of DMR scales up Cinedigm to over 30 streaming channel services, 46,000 films and television episodes and 40 million monthly viewers, while adding approximately 18.5 million social subscribers and 4+ billion views. With the addition of DMR’s owned and operated, proprietary channels – specialising in genres ranging from anime and pan-Asian programming, to action, horror, arthouse, romance, kid’s series, K-pop and more – the company will now operate 15 wholly-owned streaming services, which comprises over 50 per cent of Cinedigm’s channel portfolio.
“We are thrilled to have completed the acquisition of DMR,” said Chris McGurk, Chairman and CEO at Cinedigm. “We were very deliberate in structuring a deal that works not only to the advantage of DMR and Cinedigm but also to that of our shareholders, particularly given current financial market conditions. This also underscores Cinedigm’s strong debt-free balance sheet. We expect this acquisition to be immediately accretive and to provide multiple synergies across Cinedigm’s entire business.”
“Digital Media Rights is the perfect complement to Cinedigm,” added Erick Opeka, President of Networks and Chief Strategy Officer. “Together, we will now have the largest streaming channel portfolio and a library in size rivalling the largest players in the industry. We are also bringing aboard a team that has extensive experience building brands and communities that fans love. We look forward to building the next great streaming company, starting today.”
“We are very excited to close the deal with Cinedigm,” said David Chu, Co-Founder and CEO of DMR. “As our teams are incredibly aligned, I believe we’ll be able to hit the ground running by tapping into our collective resources and areas of expertise to scale up our streaming services to make them truly standout in the marketplace. With our combined catalogue of premium movies and TV shows, and our strong fan engagement across social media, we look forward to attracting new audiences to our services.”
Michael Hong, DMR Co-Founder and Chairman, commented: “We have been on an incredible journey since starting this company, during which we have watched the streaming video ecosystem evolve, as our industry has transformed and the way we consume content has been disrupted, to say the least. Cinedigm’s clear understanding of this evolution and transformation, and our shared vision, is a big part of what makes this deal such a logical and attractive one for all parties.”