Cinedigm Digital (CIDM) to Acquire New Video Group in $14M Deal + Potential Milestones

April 20, 2012 6:46 AM EDT
Cinedigm Digital Cinema Corp. (Nasdaq: CIDM) has agreed to acquire leading entertainment distributor New Video Group, Inc. ("New Video"), the largest worldwide digital aggregator of independent content and leading distributor of quality entertainment. Cinedigm's acquisition of New Video will create a new full service end-to-end digital releasing studio, enabling the Company to acquire and distribute independent films and specialty content both theatrically and through digital, mobile and home media platforms.

Cinedigm has agreed to acquire New Video for $14 million in upfront consideration, plus additional earn out potential of up to $6 million over three years tied to the future financial results of the Cinedigm Entertainment Group. The upfront consideration will be paid with $10 million of cash from Cinedigm's balance sheet and $4 million of Cinedigm stock issued at the trailing 10 day volume weighted average price. The acquisition is expected to close April 20, 2012. Simultaneous with this acquisition, Cinedigm has also announced an underwritten public equity offering of common stock with B. Riley & Co., LLC acting as sole book-running manager and Merriman Capital acting as co-manager of the offering. Please see our separate press release on the offering.

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