Cinedigm finalises $16.4m acquisition of Digital Media Rights

LA-based distributor and digital channels operator Cinedigm has closed its US$16.4m acquisition of streaming, advertising and distribution firm Digital Media Rights (DMR).

Chris McGurk

The deal, which was first revealed in January, will see 10 DMR-owned streaming channels, including AsianCrush and RetroCrush, move under the Cinedigm umbrella.

Under terms of the transaction, Cinedigm paid US$8m in cash at closing and will make additional payments of US$8.4m in cash or stock over the next three years.

Cinedigm, which trades on the Nasdaq, said it expects the acquisition will generate approximately US$10m in incremental revenue and US$3m in incremental adjusted Ebitda over the next 12 months.

The 10 channels acquired from DMR specialise in genres spanning action, horror, art house, romance, kids’ series, K-pop and more. In addition to AsianCrush, which features Asian film and TV series, and anime-focused RetroCrush, DMR is also the parent company of Midnight Pulp, Cinehouse, Cocoro and KMTV. It also operates four YouTube channels (C-Crush, Cinehouse Romance, K-Crush and QTTV), which have more than two million subscribers combined.

With the acquisition, Cinedigm now operates more than 30 streaming channels and has a content library spanning 46,000 hours of film and TV content. Cinedigm’s portfolio of streaming channels includes horror-focused Screambox and Bloody Disgusting.

New York-based DMR was founded by Michael Hong and David Chu more than a decade ago. The company focuses on four main areas of business: handling distribution for film and TV projects on streaming services; operating streaming channels; curating social video channels for its streaming brands; and operating the Ad Network & Marketplace, which it says generates more than 100 million connected TV impressions a month.

Cinedigm chairman and CEO Chris McGurk said: “We were very deliberate in structuring a deal that works not only to the advantage of DMR and Cinedigm but also to that of our shareholders, particularly given current financial market conditions.

“This also underscores Cinedigm’s strong debt-free balance sheet. We expect this acquisition to be immediately accretive and to provide multiple synergies across Cinedigm’s entire business.”

Erick Opeka, Cinedigm’s president of networks and chief strategy officer, added: “Together, we will now have the largest streaming channel portfolio and a library in size rivalling the largest players in the industry. We are also bringing aboard a team that has extensive experience building brands and communities that fans love.”

Earlier this month, Cinedigm revealed it had acquired a minority stake in multiplatform production and distribution company Roundtable Entertainment, which was launched in February by industry veterans Dominic Ianno, John Baldecchi, Alex Dundas and Griffin Gmelich.