China's Huayi Brothers Buys Controlling Stake in Digital Cinema Tech Group GDC
The company has also just announced a $130 million U.S. unit
Privately-held Chinese film company Huayi Brothers Media Co. has raised its equity holdings in GDC Technology, one of the world’s top digital cinema tech suppliers, to give it a controlling 79 percent stake.
Huayi Brothers bought a 9 percent stake in GDC Technology for $20.92 million from CAG Digital Investment Holdings in April 2013, which gave it the right to nominate a director to the board.
The group increased its holdings by means of an equity transfer in two stages, Huayi said in a statement. The value of the deal was not revealed. Huayi said the purchase of a controlling stake was an important step in the internationalization of its distribution, theater business development and international strategy.
Huayi Brothers has been expanding its theatrical business in recent years.
The announcement came after Huayi announced it would set up a $130 million subsidiary in the United States to invest in the distribution and production of movies and TV shows.
GDC Tech supplies equipment in more than 10 countries and regions and has 28 local offices service centers. The Hong Kong-headquartered firm is one of the world’s biggest suppliers of digital cinema servers, projectors and 3D systems. It is currently the largest supplier of digital cinema servers in Asia and is the second-largest provider of digital cinema servers worldwide, according to its website, supplying around 5,000 screens.
GDC’s operating income in the first half of this year was $36.35 million with net income of $5.91 million. In a statement, the company said that 70 percent of theaters in China use GDC's digital projectors and other technical services. Much of the cinema boom in China has been fueled by a rise in the number of cinemas, and competition is intensifying.
In June, Huayi Brothers, which is run by Wang Zhongjun, announced plans to raise $403 million from a share issue and said it would use the capital to invest in film and TV projects.