Cinedigm Closes First Tranche of Agreement to Acquire 29% Stake in Leading Chinese Entertainment Company Starrise Media
February 18 2020 - 4:05PM
Cinedigm Corp. (NASDAQ: CIDM) today announced the Company has
closed on a portion of the transactions contemplated by the Stock
Purchase Agreement signed on Friday, December 27, 2019 to acquire
approximately 29% of the outstanding equity of leading Chinese
entertainment company Starrise Media Holdings Limited (Starrise)
(1616. HK) from two existing holders in an all-stock transaction
valued at approximately US$68 million (1.). On February 14,
2020, the Company closed on the purchase of 162,162,162 Starrise
shares and issued 21,646,604 shares of Common Stock as
consideration on February14, 2020, and expects to close on the
remainder of the Starrise shares as soon as practicable.
Starrise’s ordinary shares are 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 and gross profits of US $31 million, a 97% increase from
2017 revenues and 196% increase in gross profits. Cash and cash
equivalents at the end of calendar year 2018 were approximately US
$41 million. In the first half of calendar year 2019, the company
reported revenues of approximately US $67 million and gross profits
of US $19 million, a 11% increase in revenues and 104% increase in
gross profits. Cash & cash equivalents at the end of the first
half of calendar year 2019 were approximately US$35 million.
(2.)
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.
Notes: (1.) Based on the closing price
of Starrise (HK1616) of HK$1.29 per share on
February 13, 2020.
(2.) Calculated at an exchange rate of 6.9
Chinese Yuan to 1 US dollar
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.
Contact
Cinedigm Jill Newhouse Calcaterra 310-466-5135
jcalcaterra@cinedigm.com
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