Gaiam (GAIA) to Acquire Vivendi Entertainment for $13.4M + Net Working Capital
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Gaiam, Inc. (Nasdaq: GAIA) has entered into an agreement to acquire Vivendi Entertainment, from Universal Music Group Distribution Corp., in an accretive transaction. Combining Vivendi Entertainment with Gaiam’s existing media distribution operations will create the largest independent, and third largest media distributor in the United States for non-theatrical content. Under the terms of the agreement, Gaiam will acquire Vivendi for $13.4 million plus net working capital. The transaction is expected to be completed later this month, subject to the satisfaction of customary closing conditions.
Vivendi Entertainment has exclusive distribution rights agreements with large independent studios/content providers, including WWE, Classic Media, RHI Entertainment, National Geographic, Shout Factory, Nassar Entertainment Group, NFL Productions, and other studios. In the twelve-month period ended December 24, 2011, Vivendi sold approximately 21 million units, generating gross billing to retailers of over $200 million. Gaiam will recognize the net fee revenue, so the acquisition is expected to add approximately $25 million of revenue and gross profit on an annualized basis. Reflecting the combined scale of Gaiam’s and Vivendi’s existing distribution operations, the Company expects to realize significant operational and financial synergies, including reduced third-party distribution costs and lower post-production and digital distribution costs, which are projected to drive significant margin expansion.
Vivendi Entertainment has exclusive distribution rights agreements with large independent studios/content providers, including WWE, Classic Media, RHI Entertainment, National Geographic, Shout Factory, Nassar Entertainment Group, NFL Productions, and other studios. In the twelve-month period ended December 24, 2011, Vivendi sold approximately 21 million units, generating gross billing to retailers of over $200 million. Gaiam will recognize the net fee revenue, so the acquisition is expected to add approximately $25 million of revenue and gross profit on an annualized basis. Reflecting the combined scale of Gaiam’s and Vivendi’s existing distribution operations, the Company expects to realize significant operational and financial synergies, including reduced third-party distribution costs and lower post-production and digital distribution costs, which are projected to drive significant margin expansion.
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