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Technicolor to Buy Cinedigm (CIDM) Digital Delivery Assets

French firm Technicolor is set to acquire key Cinedigm assets and a minimum of 300 incremental satellite roof rights. The plan is part of Technicolor’s deployment of its North American digital cinema equipment and will give Technicolor about a 40% increase in market footprint, with its satellite network expanding to more than 1,100 locations in the United States and Canada.

The deal is unusual in that no financial details have been disclosed. But under its terms, Technicolor will become Cinedigm’s preferred content servicing partner, including post production and distribution services. Cinedigm’s main role under the arrangement appears to be that of research and development of next generation entertainment industry software. Also included is Technicolor’s licensing of Cinedigm’s CineSuite digital delivery tools and their CineXpress trailer distribution software.

The deal is expected to wrap up in September of this year, subject to the execution of definitive documents and satisfaction of certain closing conditions. The late-day press release called the deal “a strategic software design partnership between the two companies… expected to provide superior service and value, with greater scale and functionality, to the combined studio distribution customers of each Company.” It’s seen by the companies as an effort to take advantage of opportunities offered by a growing global cinema conversion to digital.

Wednesday’s statement hints that Cinedigm might be developing an appetite for acquisitions too: “The companies intend to expand their delivery agreement as Cinedigm’s content distribution business grows organically and through acquisitions.” Part of Cinedigm’s business model includes alternative and independent film distribution.

In announcing the deal, Cinedigm CEO Chris McGurk said, “Technicolor is the market leader and highly respected in the delivery business, with strong customer relationships both domestically and internationally that will allow Cinedigm to expand our software and content distribution businesses faster and more effectively [and] by providing Technicolor access to Cinedigm’s leading software and delivery tools like CineXpress, Technicolor will enhance its position as a global innovator and become an even stronger player in its core delivery business. This is a perfect strategic alliance.”

Echoing McGurk’s view, Technicolor CEO Frederic Rose observed that the transaction “will allow our Digital Cinema business to expand its market-leading electronic distribution footprint while continuing to provide the highest level of quality and security to our studio clients.”

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