India's Prime Focus Sells Stake in Digital Domain for $30M, Plans Joint Venture
A share swap between the two companies, valued at $55 million, would cover the proposed venture that would offer services for the advertising and virtual-reality markets in India.
Indian VFX major Prime Focus Group is selling its 30 percent stake in Digital Domain-Reliance for $30 million to the company's majority shareholder, Digital Domain Holdings Ltd.
Headquartered in Hong Kong, where its shares are also listed, DDHL already owns the other 70 percent in DDR.
Prime Focus and DDHL also said they plan to form a joint venture in India, which would offer services to the advertising and virtual-reality markets. According to a joint statement, the total consideration payable to Prime Focus via issuance of DDHL shares for the 30 percent stake and the planned joint venture is $55 million. This would result in Prime Focus owning a 3.5 percent stake in DDHL.
The $25 million transaction for the proposed joint venture will see DDHL acquire a 50 percent stake in Prime Focus' U.K. subsidiary De-fi Media.
Digital Domain was originally co-founded in 1993 by Oscar-winning director James Cameron (Avatar), but it went bankrupt in 2012. The company was jointly acquired in an auction by China's Galloping Horse and Reliance MediaWorks. Last year, DDR reported a loss of $5.8 million, up from a $4.4 million loss in 2014. RMW merged with Prime Focus in 2014, which is how it inherited the 30 percent stake in DDR.
Last year, Prime Focus' creative services division Prime Focus World merged its VFX business with London-based Double Negative, the go-to facility for filmmaker Christopher Nolan. Double Negative has won Oscars for its work on Nolan's Inception and Interstellar, having also worked with him earlier on his Dark Knight films.