Buyer plans to keep Image alive
Bergstein-led BTP building content, distrib'n entityAs expected, BTP Acquisition Co. Llc., an investor group led by financier David Bergstein, has acquired independent DVD supplier Image Entertainment for about $132 million (HR 3/22).
The sales price includes the assumption of a $9 million replication advance and the repayment of about $24 million in debt. That leaves about $99 million for shareholders, who stand to receive $4.40 per share in cash, a 27% premium to Image's closing share price of $3.46 on Thursday, a day before the deal was announced.
Stockholders owning a total of about 38% of Image's outstanding shares of common stock have agreed to vote their shares in favor of the transaction. That figure does not include Lionsgate, which owns more than 4 million shares, or 19% of Image's stock.
Lionsgate in the fall tried unsuccessfully to buy Image for $4 a share. Lionsgate wanted to buy Image solely for its library of 3,000 DVD and 200 CD titles and distribution deals with Relativity Media, Discovery Communications and the Criterion Collection. BTP, by contrast, intends to keep the company running and even growing.
"We always felt the value of Image was more than its library," Image COO David Borshell said. "And BTP validates this sentiment by acquiring us at a premium price and keeping the entity operating."
The transaction is expected to close by July. It is anticipated that Image will then become a private company.
BTP is led by Bergstein, who recently bought U.K.-based Capitol Films, an international film distributor, and ThinkFilm, a North American film distributor. Bergstein initiated the Image deal as a way of increasing his position in the home entertainment market.
"Image's executive team has built a first-rate company, and we are pleased to be able to provide a strong cash price to the Image stockholders and maintain Image as the leading independent home entertainment distributor," he said.
Martin Greenwald, Image's chairman and CEO, said the transaction "provides excellent value for our shareholders, representing a significant premium to our recent stock price and the certainty of cash."
He said the acquisition "allows Image to remain a viable and important force in the entertainment industry and to continue leveraging our strong home entertainment operations."
Image in January hired Jeff Fink, a veteran marketing executive who has held senior management positions at Miramax Home Entertainment and Artisan Home Entertainment (before its merger with Lionsgate), as its chief marketing officer. Fink was hired to lead Image beyond its current core of music, cult and other niche programming and into the feature film arena.
Borshell said he sees lots of synergy with Image's soon-to-be sister companies.
"By putting Image together with Capitol Films and ThinkFilm, Bergstein is really creating a worldwide content and distribution entity," he said.
Image is headquartered in Chatsworth, Calif., and has a domestic distribution facility in Las Vegas.