So long and thanks for all the Guinness - DTS has put an end to the corporate Seitensprung that was DTS Digital Cinema, which has been picked up by UK satellite company Beaufort International Group Plc. Here is what the press release on DCinemaToday.com had to say in the opening paragraph:
Beaufort International Group Plc announced today that it has acquired the business and assets of DTS Digital Cinema from DTS, Inc. for an undisclosed sum. Beaufort made the acquisition through its US subsidiary, Beaufort California, Inc. Chris Thomas, Beaufort California, Inc.’s CEO, commented, “We are very pleased to have made this acquisition. DTS is an established brand in the cinema industry, and provides a solid foundation for us to develop our plans in digital cinema.” Thomas continues, “DTS has laid the groundwork for us with its 15-year history in providing the highest quality digital audio for film to over 30,000 screens worldwide.
The price has elsewhere been quoted as $3.3m, which puts it at leas than half of the previously disposed Lowry Digital Images (sold last month to Reliance for $7.5m). From the press release we learn that Beaufort “will continue to use the DTS brand for the foreseeable future under our agreement with DTS.” Strangely there appears to be no website for Beaufort, so it is up to the trusty analysts at Screen Digest to drill down into the deeper meaning of this buy:
Datasat is a deliverer of media content through its wholly-owned (mainly) satellite networks, and the acquisition fits into a strategy of widening their reach to the digital cinema space. Up to now, Datasat’s content delivery strategy has focused on areas where high quality, secure file trasnfers are necessary, and has avoided media and broadcast industries. However, with the introduction of digital cinema, which needs very secure networks for large files (as opposed to live feeds or pre-recorded broadcasts) this move makes sense. Currently, company operates in five broad industrial areas: corporate, diplomatic, emergency, security, medical.
Nowhere is there any mention of Ireland, perhaps wisely as the nationwide Irish conversion to digital cinema is a standing joke in digital cinema circles. While there have been some positive noises about the DTS Digital Cinema hardware and platforms, it remains to be seen how the de-merged company will succeed against the likes of Doremi and Dolby, which unlike DTS is holding on very hard to its digital cinema division.
DTS meanwhile goes back to focusing on consumer products licensing, which seems to be a profitable field judging by this article; DTS shares jump as 1Q profit rises on sales.
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Pyramid Saimira continues to play in the merges and acquisitions pool, this time buying a majority stake in the U.K. gaming company, Aurona Technologies. While there are no details as to the amount Pyramid spent, VC Circle reports it was an all cash deal.
At first glance, Aurona Technologies may not initially seem like a an appropriate acquisition for Pyramid Saimira Group which has traditionally been focused on film production, distribution and exhibition. After all, Aurona is a video game software company with headquarters in London and offshore development offices in Hyderabad. They specialize in working with video game developers who publish titles for devices such as Sony’s Playstation and Microsoft’s XBOX 360. However, Pyramid’s theater subsidiary is looking to install the latest digital cinema equipment in their venues a move that would allow their theatres to be used for viewing concerts, sporting events, meetings and. . . interactive gaming tournaments.
Another thought might be that Pyramid is looking to acquire some engineering and software expertise as it looks to build out its digital cinema operations.
Whatever the motivation, Pyramid no doubt has a plan. In the last half of 2007 the company acquired a controlling portion of Dimples Cine Advertising, a Mumbai based cinema advertising company, and in November hoovered up the Texas based FunAsiA theatre chain with hopes of expanding its 23 screens to 60 within a year. They weren’t nearly as successful in their October bid to pick up Hoyts Group, the Australian based multiplex theatre operator.
]]>The stereotype of the immigrant Indian convenience store worker that has kept Apu employed at the Kwik-E-Mart for the past 17 years on ‘The Simpsons‘ may soon have to be changed to that of the immigrant Indian concession stand employee. Recently, the Indian cinema chain Pyramid Saimira Theatre announced it had purchased FunAsia, a Texas-based 17 screen circuit. On Monday, their competitor Adlabs Films announced that it would take over operations for “several existing cinema properties” in the United States accounting for 200 screens in 28 cities.
Adlabs is one of India’s largest entertainment corporations producing and distributing both film and television in addition to a thriving post production business. Adlabs Cinemas is the company’s exhibition subsidiary and operates 112 screens in 37 theatres.
There was little information about the deal other than a few blurbs found online and this post on IndianTelevision.com. Whether Adlabs were buying the theatres outright, leasing them or simply taking over operations was not disclosed. Who knows, maybe all these “existing cinema properties” are run-down single screen dives in the middle of nowhere. Though this is highly unlikely given the immigrant population Adlabs would no doubt hopes to attract to such venues with Indian language films they intend on programming. All news reports pegged the theatres in major markets on the East and West Coasts as well as the Mid-West.
To put the news in some perspective, medium sized circuits such as Landmark Theatres run 232 screens in 58 locations. Likewise Muvico has 14 locations housing 259 screens. So, starting out in the U.S. with 200 screens would nearly put Adlabs on the same level when it comes to screen count. Only time will tell whether they can compete in revenue. Given their size and ongoing success however, Adlabs does not seem like a company that likes to fail. Indeed, with Pyramid Saimira Theatre investing as much as $75 million in their U.S. theatres, it would not be shocking to see Adlabs double or triple such an investment in their North American cinema operations.
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Indian exhibition company Pyramid Saimira Theatre (PSTL) has become the first Indian cinema operator to enter the US market with the acquisition of FunAsia cinema, radio and banquet halls (!) operation in Texas. The exhibitor operates 11 screens in Houston and six in Dallas where it mainly shows Hindi (Bollywood) films, making it the largest Asian theatre chain in the US. The acquisition was covered in most of the India press, given the uniqueness of the international expansion - though Pyramid already operates cinemas outside India in Malaysia and Singapore - with the best being in the financial press, such as the Business Standard:
“The US and Canada are big markets for Hindi and south Indian movies, and we intend to increase the number of screens of FunAsia in the US to 60 by the end of this fiscal from the present 23 screens by expanding to about 15 locations,” P S Saminathan, managing director, PSTL, said.
PSTL has four subsidiaries for film production, distribution and international theatre business, and each one will have separate fund-raising programmes, he added.
The company is also looking at aggressively expanding in the high-margin food and beverages business to boost its bottom line. While it is exploring the option of floating a separate company for the food and beverage business in India, it also intends to set up 10 food courts, involving an investment of about Rs 15 crore, in its multiplexes across the country under the brand name Cafe Pyramid this fiscal.
And the Economic Times:
The acquisition was made through its subsidiary Pyramid Saimira Entertainment America, and is aimed at targeting 80 to 90 per cent of share in the Asian film market.As the US and Canada are the second major overseas markets for Hindi and South Indian films, the company planned to set up 60 screens at 15 locations in those countries by the end of the current fiscal, PSTL Managing Director P S Saminathan told reporters here.
Declining to divulge the value of the acquisition, he said FunAsiA complexes included 17 screens with 4,765 seats and catered to South Asians in north America. PSTL would make a foray into the UK market in the third quarter, he added.
While the acquisition is significant, it comes not long after the failure of the more ambitious take over attempt of Australian exhibitor Hoyts. However, this is a foot in the door of the US market and if it is to be by targeting the more obvious NRI (non0resident Indians) market first, so be it, Pyramid must be speculating.
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Australian exhibitor Hoyts has been sold to Pacific Equity Partner in a defeat to India’s Pyramid Saimira Theatre, which had pursued the deal aggressively. James Packer’s Publishing & Broadcasting Ltd. and West Australian Newspapers Holdings Ltd. are reported to have sold Hoyts Australian and New Zealand cinemas and stake in cinema advertiser Val Morgan in a deal valued at A$440m ($382m). The article by Bloomberg says that Packer is looking to sell media assets to invest more in gaming:
Pacific Equity plans to invest in Hoyts’s 40 Australian and nine New Zealand cinemas to reverse declining attendances. Third-quarter pretax profit at Hoyts fell 9 percent to A$8.5 million as a dearth of blockbuster movies hurt ticket sales.
“We believe there are opportunities for growth through further investment in digital entertainment and digital advertising media technologies,” Simon Pillar, Pacific Equity’s managing director, said in an e-mailed statement.
Publishing & Broadcasting and West Australian will each get A$150 million from the deal. The companies combined in January 2005 to acquire Hoyts from Packer’s private company, Consolidated Press Holdings Ltd., for A$347 million.
The deal is a blow to the international expansion plans of Pyramid Saimira Theatres, who were reported to have offered A$450m for Hoyts, i.e. A$10m more than Pacific, but for whatever reason they lost out.
]]>The latest from Publishing & Broadcasting’s imminent sale of Australian cinema chain Hoyts is that the field of candidates is now down to two suitors. Sydney buyout firm Private Equity Partners is down to the wire against India’s Pyramid Saimira Theatre, as the offer prise has gone up to a reported $450 million. The Indians seem the most keen on the deal, according to an article in the Sydney Morning Herald:
Pyramid, which is based in Chennai, is India’s largest digital cinema chain with more than 126 theatres, which it wants to increase to 1000 cinemas across the country over the next two or three years. It raised $US90 million ($104 million) in July by selling convertible bonds in order to expand internationally.
Managing director PS Saminathan was in the US yesterday and could not be reached for comment on a report in Mumbai’s Business Standard that said he expected to win the bidding contest for $450 million. He said in an interview two weeks ago that buying Hoyts “will add a huge amount of value to the group because we are already present in India, in Malaysia and in Singapore.”
West Australian Newspapers, which bought half of the stake in Hoyts from PBL in 2004 looks set to follow PBL’s lead and sell out when the sale goes through rather than to try to match the bid price. Bidders have to place their final offers ‘today’(it’s Friday in Australia already) and the sale is expected to go through in November.
]]>The sale of Hoyts, one of Australia’s Big Three exhibitors, is said to be imminent. Partly owned by James (Son of Kerry) Packer’s Publishing and Broadcasting and West Australian Newspapers, which bought Hoyts for $347m just two years ago. The asking price is said to be north of $400, but this article from Herald Sun puts its finger adroitly on the problem with this or any other cinema business:
“There is not a lot you can do with it with your other businesses,” said Deutsche Bank media analyst Andrew Anagnostellis.
“The problem with that business is that you are really dependent on the product that comes out of Hollywood. So if there are big blockbusters coming through you do well, if not you don’t do well and the reality is it is not under your control.
“You’ve got essentially a fixed cost business with big variations in output.”
The potential buyers are said to include Reading Entertainment, Prime Television, Pacific Equity Partners and Catalyst Investment Managers, as well as Indian cinema operator Pyramid Saimira Theatre (see below). The deadline for bids are set to be this Friday, so don’t delay if you fancy you own cinema chain Down Under.
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