Cinedigm Announces Closing of GVE Acquisition, Credit Facility and Underwritten Public Offering
CENTURY CITY, Calif. & NEW YORK--(BUSINESS WIRE)--
Cinedigm Corp. (NASDAQ: CIDM) announced today it closed the previously
announced acquisition of Gaiam, Inc.'s (NASDAQ: GAIA) entertainment
unit, known as "GVE," a leading distributor of home entertainment brands
and content, for $51.5 million, subject to a working capital adjustment.
In connection with funding the acquisition, Cinedigm closed today on the
following financing arrangements: (i) a new $55 million senior secured
credit facility arranged and led by Société Générale Corporate and
Investment Banking that includes a $25 million 3-year term loan funded
at closing and a $30 million revolving credit facility of which $15
million was drawn at closing; (ii) a $5 million subordinated 5-year loan
facility; (iii) $3 million of restricted Cinedigm stock, of which $1
million was issued to Gaiam as part of the purchase price and $2 million
was purchased by an existing shareholder; (iv) a $13.0 million
underwritten public offering of common stock, inclusive of a $1.5
million over-allotment, with B. Riley & Co., LLC and National Securities
Corporation, a wholly owned subsidiary of National Holdings, Inc.
(OTCBB:NHLD), acting as co-lead managers. The acquisition and related
financings closed on October 21, 2013. Blackstone Advisory Partners L.P.
acted as financial advisor to the Company in connection with the
acquisition of GVE and Merriman Capital acted as capital markets advisor
for the equity offering.
The senior secured credit facility will be at an interest rate of, at
Cinedigm's election, Base Rate (as defined in the credit facility) + 3%
or the Eurodollar Rate (as defined in the credit facility) + 4% and will
mature on October 17, 2016.
The subordinated 5-year loan facility consists of notes with an interest
rate of 9% and 5-year warrants to purchase an aggregate of 1,500,000
shares of Cinedigm common stock at $1.85 per share.
Cinedigm closed on an underwritten public offering of 4,895,105 shares
of common stock, at a price to the public of $1.43 per share and will
close on an additional 4,194,885 shares on October 23, 2013. In
connection with the offering, B. Riley & Co., LLC and National
Securities Corporation are acting as underwriters, with B. Riley & Co.,
LLC acting as the representative.
The Company plans to use $40 million from the credit facility, $5
million from the loan facility and the approximately $10.4 million net
proceeds from both closings of the underwritten offering for working
capital, acquisitions and general corporate purposes, including to fund
the acquisition of GVE.
Ten employees of GVE who are joining Cinedigm received options to
purchase an aggregate of 620,000 shares of Cinedigm's Class A Common
Stock. Such options will have 10-year terms and exercise prices equal to
today's closing price of the Class A Common Stock on the NASDAQ Global
Market, and are being granted as inducement options pursuant to NASDAQ
listing Rule 5635(c)(4).
Over the past decade, Cinedigm has led the digital distribution
revolution that continues to transform the media landscape. In addition
to its pioneering role in transitioning movie theatres from traditional
film prints to digital distribution, Cinedigm continues to advance
worldwide cinema modernization with its suite of software products
allowing exhibitors and distributors to manage their newly digital
businesses with efficiency, insight and certainty. And, as the leading
distributor of independent content in the world, Cinedigm collaborates
with producers and the exhibition community with unequalled transparency
to market, source, curate and distribute quality content across all
digital platforms to targeted and profitable audiences.
Current and upcoming CEG releases include Destin Daniel Cretton's SHORT
TERM 12, Godfrey Reggio's VISITORS, Penny Lane's OUR NIXON and Shaul
Schwarz's NARCO CULTURA.
Cinedigm™ and Cinedigm Digital Cinema Corp™ are trademarks of Cinedigm
Safe Harbor Statement
Investors and readers are cautioned that certain statements contained in
this document, as well as some statements in periodic press releases and
some oral statements of Cinedigm officials during presentations about
Cinedigm, along with Cinedigm's filings with the Securities and Exchange
Commission, including Cinedigm's registration statements, quarterly
reports on Form 10-Q and annual report on Form 10-K, 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 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
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.
Cinedigm Public Relations:
Jill Newhouse Calcaterra, 424-281-5417
Source: Cinedigm Corp.
News Provided by Acquire Media
Close window | Back to top