Cinedigm Agrees to Purchase 29% Stake in Leading Chinese Entertainment Company Starrise Media
December 19 2019 - 9:15AM
Cinedigm Corp. (NASDAQ: CIDM) today announced the Company has
signed a non-binding letter of intent to buy approximately 29% of
the outstanding current common shares in leading Chinese
entertainment company Starrise Media Holdings Limited (Starrise)
(1616. HK) from existing holders. Cinedigm and Starrise have
previously agreed to distribute Chinese entertainment content in
North America and to release non-Chinese entertainment content in
China theatrically and on digital platforms.
Cinedigm will purchase approximately 29% of Starrise’s current
common shares from two major Starrise shareholders in exchange for
shares of Cinedigm’s Class A common stock. This all-stock purchase
will be based on the trailing volume weighted average prices of
Cinedigm and Starrise common stock over a time period to be
determined by the parties to the transaction.
This proposed transaction follows the significant investment in
Cinedigm by Bison Capital, a China-based investment company with a
focus on the media and entertainment, healthcare and financial
service industries. Founded by Mr. Peixin Xu in 2014, Bison Capital
has made multiple investments in film and TV production, film
distribution and entertainment-related mobile Internet services. As
a result of this proposed transaction, Bison Capital and related
entities will increase their investment and ownership levels in
Cinedigm.
“This proposed investment will be a major transformative
transaction for Cinedigm,” said Chris McGurk, Cinedigm’s Chairman
and CEO. “It is a key step in our plan to become the first true
North America/China studio, uniquely well positioned over the long
term to distribute premium film and TV content and launch high
growth streaming channels in the two biggest and most important
entertainment markets in the world. It will also enhance our
efforts to rapidly build our fast-growing OTT business.”
“Bison Capital is very supportive of this proposed transaction,”
said Peixin Xu, Chairman of Bison Capital. “We are very committed
to supporting Cinedigm as the Company executes its compelling
content distribution and OTT streaming strategies in North America
and China. Our increased investment in Cinedigm as a result of this
transaction fully underscores our support.”
Through this proposed transaction, Cinedigm will increase its
presence and leverage in both the Chinese and North American
entertainment markets. These are the two biggest Film and
Television markets in the world, with combined Film/TV revenues
estimated to be approximately US$180 billion in 2018.
Leveraging its unique OTT and independent content distribution
capabilities, Cinedigm has been working closely with Bison to
develop plans and forge partnerships to release entertainment
content and develop OTT channels in China while, reciprocally,
releasing Chinese content and new OTT channels in North America,
such as the recently launched Chinese language content channel,
Bambu.
Starrise is listed on the main board of the Stock Exchange of
Hong Kong Limited. In calendar year 2018, Starrise reported
approximately US$139 million in total revenues. (1.) Starrise’
Film/TV business segment mainly invests in film, television and
other short form content. Starrise distributes film content
theatrically and to all key media platforms in China and is
committed to significantly growing its investment in entertainment
content for the rapidly expanding Chinese theatrical and digital
marketplaces. Recent prominent film investments by Starrise include
The Wandering Earth, one of the most successful Chinese films ever
released, generating almost US$700 million at the box office in
China in 2019 and The Grandmaster of Kung Fu, a successful
internet-released action movie.
The all-stock purchase is expected to close in the first quarter
of calendar 2020, subject to the completion of a definitive
purchase agreement and the receipt of the approval of Cinedigm’s
stockholders and other applicable regulatory approvals.
ABOUT CINEDIGM
Since inception, Cinedigm (NASDAQ: CIDM) has been a leader at
the forefront of the digital transformation of content
distribution. Adjusting to the rapidly transforming business needs
of today’s entertainment landscape, Cinedigm remains a
change-centric player focused on providing content, channels and
services to the world’s largest media, technology and retail
companies. Cinedigm’s Content and Networks groups provide original
and aggregated programming, channels and services that entertain
consumers globally across hundreds of millions of devices. For more
information, visit www.cinedigm.com.
Cinedigm™ and Cinedigm Digital Cinema Corp™ are trademarks of
Cinedigm Corp. www.cinedigm.com. [CIDM-G]
Safe Harbor Statement
Investors and readers are cautioned that certain statements
contained in this document are "forward-looking" statements within
the meaning of the Private Securities Litigation Reform Act of 1995
(the "Act"). Forward-looking statements include statements that are
predictive in nature, which depend upon or refer to future events
or conditions, which include words such as "expects,"
"anticipates," "intends," "plans," "could," "might," "believes,"
"seeks," "estimates" or similar expressions. In addition, any
statements concerning completion of the transactions described in
this document, future financial performance (including future
revenues, earnings or growth rates), ongoing business strategies or
prospects, and possible future actions, which may be provided by
Cinedigm's management, are also forward-looking statements as
defined by the Act. Forward-looking statements are based on current
expectations and projections about future events and are subject to
various risks, uncertainties and assumptions about Cinedigm, its
technology, economic and market factors and the industries in which
Cinedigm does business, among other things. These statements are
not guarantees of future performance and Cinedigm undertakes no
specific obligation or intention to update these statements after
the date of this release.
Notes: (1.) Calculated at an exchange rate of 6.9 Chinese Yuan
to 1 US dollar
Contact
Cinedigm Jill Newhouse Calcaterra 310-466-5135
jcalcaterra@cinedigm.com
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