Netgem deals boost market presence
June 23, 2023
By Colin Mann
Digital video entertainment specialist Netgem has confirmed the acquisition of Eclair Préservation (EP) and Eclair Digital Services (EDS). EP and EDS have a combined portfolio of over 500 clients in France, both producers and broadcasters, whose works they securely store and digitise, including more than two-thirds of France’s film heritage.
The merger with Netgem’s French operations will enable Netgem to enhance its offering for audiovisual production, in particular movies. It also reinforces Netgem’s strategy as a key value-added intermediary between content publishers (cinema, TV, video games, etc.) and distributors such as telecom operators.
“For over 25 years, Netgem has been a key player to accelerate the digital transformation of the video market from a mass market TV-centred service to an increasingly personalised consumer experience across all devices – with a strong focus on films and VoD,” commented Mathias Hautefort, CEO of the Netgem Group and President of its French subsidiary Vitis. “This transformation is far from over: video games, virtual reality and artificial intelligence all are new opportunities for an industry that Netgem will continue to support. The acquisitions of EP and EDS, combined with the arrival of prestigious new shareholders, are additional assets in our deployment of the Group’s strategy.”
In parallel with these acquisitions, Netgem has announced that it is buying out the minority stakes held by Caisse des Dépôts and Oceinde in Vitis. This will simplify the Group’s structure and its governance, and enable the implementation of post-acquisition synergies.
The total investment for these operations amounts to €7.4 million, financed by a €5 million reserved capital increase, subscribed by Caisse des Dépôts for €3 million and Manco, the reference shareholder of the acquired activities alongside J.2.H., for the rest. New shares will be issues at a price of €1.20, evidencing a premium of 12.7 per cent over the price at close of market the day before. The balance of €1.8 million will be financed by the company’s cash and the assumption of €0.6 million in debt from the acquired companies. Caisse des Dépôts will hold 7 per cent of Netgem’s capital and Manco close to 5 per cent. These two new shareholders will be represented on the Board of directors of the company.
The change in scope resulting from these transactions is expected to increase the Group’s 2024 earnings per share (EPS) by more than 10 per cent after synergies. The parties’ objective is to finalise the transaction at the beginning of July 2023, with a positive impact on earnings from the second half of 2023.
The acquisition of Eclair Préservation and Eclair Digital Services amounts to €4 million in enterprise value, and that of the minority shareholders in Vitis to €3.4 million.