China, India companies beat PE to Digital Domain assets
China’s Galloping Horse Film and India’s PE-backed Reliance MediaWorks have teamed up to acquire assets from Digital Domain Media Group, the distressed Hollywood special effects company, for $30.2 million. The Sino-Indian joint venture easily outmatched a $15 million offer put in by Searchlight Capital Partners.
Galloping Horse holds 70% of the joint venture to Reliance MediaWorks' 30%. The assets they have bought include visual effects studios in Venice, Los Angeles and Vancouver, Canada. Their agreement with Digital Domain is subject to bankruptcy court approval.
Founded by Oscar-winning director James Cameron in 1993, Digital Domain worked on more than 90 movies such as Titanic, Pirates of the Caribbean: At World's End and the Transformers franchise. The company filed for bankruptcy protection earlier this month in the face of rising industry competition, fewer projects and costs tied to expansion, The Los Angeles Times reported.
"Digital Domain is a legend in the industry, known for its world-class quality of work and creative talent," said Ivy Zhong, vice chairman and managing director of Galloping Horse. "We are thrilled to have found a partner in Reliance MediaWorks that is as committed as we are to ensuring Digital Domain's continued excellence and success."
Digital Domain CEO Ed Ulbrich added that partnering with the Chinese and Indian players gives the company strength and reach in the global entertainment market, putting it in the best financial position it has ever been in.
Reliance MediaWorks previously worked with Digital Domain on setting up post-production studios in London and Mumbai.
In July, the Indian firm announced that it had signed a term sheet with "a leading international private equity fund" regarding the acquisition of a substantial minority stake for INR6.05 billion ($113 million). According to media reports, the private equity investor is L Capital, the private equity arm of luxury giant LVMH.
Digital Domain does not represent the first foray by a Chinese firm into the US entertainment industry. Earlier this year, Dalian Wanda Group acquired movie theater chain AMC Entertainment from Apollo Global Management, CCMP Capital Advisors, Bain Capital, The Carlyle Group and Spectrum Equity for $2.6 billion.
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